GBP/CHF Bearish Shark
Updated
Over the next few days I'll be keeping an eye on this bearish setup on the Pound-Franc.
Looking at the structure of the daily chart you can see were consecutive higher highs and higher lows have previously been made. We were now at a stage where price has ultimately ran out of steam and made a lower low (see below). Following the lower low we are witnessing the possible formation of a harmonic bat pattern on the 4 hour chart. Combining this with the structure of the higher timeframe, this may be the re-test of daily resistance- a double top on the 4hr.
Furthermore, the Bank of England's interest rate will be released on Thursday 23rd of March. The rate is highly expected by most parties to remain at 0.5%, however these releases are known to bring extreme volatility to the foreign exchange markets so we will be very cautious. This announcement, and its impact, may well make or break this set up. I will be updating this further should I be looking to enter the position. Ideally this will not happen before the rate is released.
All this aside, the rules stay the same. Shark Ratios are as follows:
C = 1.13-1.618
D = 1.618-2.24
X to D = 0.886-1.13
Risk at a minimum of 1:2
4-hour and daily candlesticks will be monitored in the aftermath of the rate announcement. Watch this space!
Looking at the structure of the daily chart you can see were consecutive higher highs and higher lows have previously been made. We were now at a stage where price has ultimately ran out of steam and made a lower low (see below). Following the lower low we are witnessing the possible formation of a harmonic bat pattern on the 4 hour chart. Combining this with the structure of the higher timeframe, this may be the re-test of daily resistance- a double top on the 4hr.
Furthermore, the Bank of England's interest rate will be released on Thursday 23rd of March. The rate is highly expected by most parties to remain at 0.5%, however these releases are known to bring extreme volatility to the foreign exchange markets so we will be very cautious. This announcement, and its impact, may well make or break this set up. I will be updating this further should I be looking to enter the position. Ideally this will not happen before the rate is released.
All this aside, the rules stay the same. Shark Ratios are as follows:
C = 1.13-1.618
D = 1.618-2.24
X to D = 0.886-1.13
Risk at a minimum of 1:2
4-hour and daily candlesticks will be monitored in the aftermath of the rate announcement. Watch this space!
Note
Here is my breakdown on the structure of the daily chart:Note
The weekly chart shows the strength of the resistance we are currently facing on the lower time frames- along with the bearish engulfing candle after price was rejected at that level. The bearish engulfing confirms that, without the impact of fundamental influence, the prior trend has/is coming to an end.Note
A quick update on things here guys. Should price break this channel, we should see the momentum take price down to our TP target (with a potential re-test of support-turned-resistance along the way on the 1 hour chart. I also have my eye on the daily chart as it looks like this day's candle may close as a bearish engulfing!
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