GBPCHF tested the 1.2017 high at the 61.8% Fibonacci retracement of the 1.1620-1. 2260 leg.
At the time of writing, prices are pulling back towards the Ichimoku cloud. This is where the 38.2% retracement lies, by 1.1867.
With a close below 1.20 yesterday, the bearish pullback could continue into lower territories.
If the cloud absorbs prices then the possibility of a move lower will increase. This could see levels move to the bottom of the cloud near the 38.2% Fibo.
However, with the Tenkan line crossing back over the Kijun line this indicates the bias is still on the upside. Previous standard and hidden bullish divergence signals on the momentum indicator suggest another test at 1.2017 is likely.
A look on the 2h chart shows a descending channel with prices having formed a false break above the upper channel. Currently, we are witnessing prices touch 1.1939 which is at 50% of the Fibonacci retracement of the 1.1850 – 1.2027 leg.
The move on the downside eyes the emergence of the cloud in conjunction with the median regression and the 61.8% confluence level. Should prices break down through this zone it would bolster the chance of a further fall towards the lower channel.
However, a bounce is expected at the lower regression as we see a bullish divergence supporting a potential move towards the upside. In the short term, prices could then progress once again past the 61.8% and 50%, and even past the 1.20 psychological area, supporting the aforementioned restest.