Promising Bearish Setup on GBP/CHF

A compelling bearish setup is developing on British Pound to Swiss Franc (GBP/CHF). On the daily chart, yesterday’s price action created a shooting star candlestick—often a signal of potential reversal. Importantly, this shooting star appeared at a key horizontal resistance level, marked in yellow, adding further significance to the bearish potential.

Primary View: Bearish Signal

• Reversal Confirmation: If today’s candle closes with a long bearish body or finishes significantly below the opening price, this will complete a classic bearish reversal pattern. Such price action will confirm the shooting star and signal a strong opportunity to sell.
• Bearish Target: The immediate downside target is the red uptrend line, which has served as a support level in previous corrections.

Alternative View: Bullish Scenario

• Invalidation of Bearish Signal: If the price manages to close today above the yellow resistance, this would negate the bearish setup and generate a signal to buy. However, the chances for this outcome appear rather limited based on current price dynamics.

Outlook

The bearish sentiment currently dominates the chart, with high probabilities of the price heading toward the red uptrend line. A confirmed reversal here would present a strong trading opportunity, favoring sellers in the short to medium term. Keep a close watch on today’s candle to finalize the direction.

Source: https://www.axiory.com/analytics/technical-analysis/promising-bearish-setup-on-gbp-chf