FxWirePro: GBP/CHF market profile indicates trend day – Bid double-touch trades

GBPCHF bullish streaks have dragged further after yesterday’s stern bullish engulfing pattern candle at 1.2596 levels. The current price (1.2636 levels) is sensing little overbought pressures.

On the contrary, the minor trend of the pair has failed at around the stiff resistance of 1.2643 levels quite a few times in the recent past, the prevailing interim upswings are likely to restrain below these stiff resistance levels.

Market profile on 4H: 

Point of control (PoC) is at 1.2635, 

Unfair highs – 1.2642

Unfair lows – 1.2602

Value area (VA) – 1.2642 – 1.2614

21-SMA – 1.2598

7-DMA – 1.2624

RSI – Shows upward convergence but faded at 63-65 levels, which is shrinkage of strength in the previous upswing. If the buying sentiments sustain, then the rallies most likely to prolong. Otherwise, one shouldn’t be wondered by some dips to resume the major downtrend.

Fast stochastic curves - %k crossover in the overbought zone while articulating.

Well, overall, if the market is imbalanced, it would look in for the point of control which is the fair price, and that’s where both the buying and selling activities are predominant (call and put options holders). Such imbalance can generate big trend day.

On a broader perspective, the major downtrend likely to extend as it has been sliding below 21-EMA upon the occurrence of the bearish engulfing pattern at 1.2638 levels, while both trend (EMA & MACD) and momentum oscillators (RSI & stochastic curves) are on the bearish bias.

Hence, at spot reference: 1.2636 levels, double touch options are suggested on a trading basis, use upper strikes at 1.2666 and lower strikes at 1.2625 levels.

The professional traders reckon that one of the most pragmatic options strategies that encompass such trading will necessitate the choosing of a focused price, which happens to be higher or lower than the strike price. This will end up putting the trader in a position to fetch returns from a boost in the underlying spot price or even a decrease. It’s quite prudent to manage both sides of motion when it is shifting around in an unstable manner. Profits are certain in this strategy but an underlying price should never be certain fixed.

Currency Strength Index: FxWirePro's hourly GBP spot index is inching towards 147 levels (which is bullish), and hourly CHF spot index has bearish index is creeping at -35 (bearish) while articulating (at 10:27 GMT). 

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex