RIGHT SHOULDER POTENTIALLY FORMING BELOW KEY LEVELHello traders!
Here’s a GBP/CHF sell idea based on market structure, trend, momentum, and supporting fundamentals.
(This is market analysis, not financial advice. Always use proper risk management and seek additional confirmation before entering a trade.)
📉 Market Structure
• Overall bearish trend since mid-year (clear lower highs and lower lows).
• The recent rally into December appears corrective rather than impulsive.
• Price has rejected a prior supply / resistance zone, reinforcing bearish structure.
➡️ This move looks like a pullback into structure, not a trend reversal.
🔑 Key Sell Condition
Sell bias confirmed after a daily close below the 1.06700–1.07000 zone.
Why this matters:
• Confirms buyers failed to hold reclaimed structure
• Signals sellers are back in control
• Helps avoid getting trapped selling too early
🎯 Trade Plan
Entry
• Sell on a retest of the zone
(1.06700 – 1.07000)
Targets
1. TP1: 1.06000 (Intraday)
→ First demand / reaction low
2. TP2: 1.05500 (Swing)
→ Deeper demand & trend continuation level
Stop Loss
• Above the recent rejection high / supply zone
(Conservative traders may wait for a deeper pullback to tighten risk.)
🧠 Why This Setup Is Clean
• Daily timeframe confirmation ✅
• Rejection from prior supply ✅
• Trend alignment (sell rallies) ✅
• Clear invalidation if price reclaims the zone ❌
🇬🇧 UK Economic Data — Bearish GBP Pressure
📉 UK GDP Weakness
• UK GDP contracted 0.1% in October 2025, marking two consecutive months of contraction.
• This raises recession risks and increases pressure on the BoE to ease policy.
➡️ Why it matters:
Slower growth typically leads to currency weakness as markets price in lower rates and reduced yield appeal.
💷 BoE Rate Cut Expectations
• Markets are pricing in a BoE rate cut (potentially December 2025), with expectations for further easing into 2026.
➡️ FX implication:
Lower interest rates reduce GBP’s attractiveness relative to safer or more stable currencies like CHF.
📊 Inflation & Structural Weakness
• UK inflation remains elevated but is clearly easing.
• Structural growth issues and low business confidence continue to weigh on the pound.
🇨🇭 Swiss Economic Data — CHF Support Nuance
🟢 Swiss Inflation Softening
• Swiss inflation has fallen more than expected, occasionally weakening CHF in pairs like USD/CHF.
➡️ This may limit upside in CHF at times — however…
🏦 SNB Policy & Growth Outlook
• Switzerland maintains very low policy rates, with inflation historically subdued.
• The IMF has lowered Switzerland’s growth forecast, but overall stability remains intact.
➡️ Why CHF still strengthens:
Despite low rates, CHF remains a safe-haven currency, often strengthening during risk-off conditions.
📊 Why Fundamentals Support a GBP/CHF Drop
• ✅ BoE easing bias → GBP weakness
• ✅ Safe-haven demand for CHF during uncertainty
• ✅ Relative growth divergence favors CHF over GBP
📌 Final Conclusion
If UK data continues to weaken while CHF remains relatively stable, this strengthens the case for:
➡️ GBP/CHF breaking lower from resistance
🎯 Targeting 1.06000 and potentially 1.05500
Analyze for additional confirmations and good luck to all traders!
