The GBPCHF has rallied from its lows and ran straight into its declining resistance level as shown on this H4 chart. This pair has the ingredients for a breakout, but it needs to stage a minor correction in order to gather steam and break its resistance level. The correction could be limited to its support level around 1.5100 which is enforced by its 50 DMA.
MACD has been bullish and supported the rally from its lows. The strength in momentum provides further evidence that this pair may be able to launch a successful breakout after a minor correction. RSI has reached extreme overbought territory and provides the final sign for an imminent pullback which will support the uptrend.
We recommend taking a short position at 1.5230. There may be an additional entry point around 1.5360. Traders are advised to hedge their short with a long position using half the volume before adding to existing short positions.
Traders who wish to exit at a loss should place their stop loss level at 1.5360 as we will never use stop loss levels and remain in the hedged trade as described above. Place your take profit level below 1.5130.