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GBP/CHF Is Ready to Switch to Uptrend with Help of Bullish Pennant

September 16, 2018 (Last updated on November 23, 2019) by

The daily chart of the GBP/CHF currency pair is showing a classic version of a well-formed bullish pennant pattern. It appears exactly at the bottom (as of now) of a major downtrend, which lasts since mid-April. Luckily, a pennant can be traded irrespective of the preceding trend.

On the image below, you can see the pattern marked with the yellow lines. My potential entry level is marked with the cyan line. It is placed at 10% of the pole’s length above the upper border. My potential take-profit level is shown with the green line, which is located at 100% of the pole’s length above upper border. My stop-loss will be set to the low of the breakout candle if it is trading inside the pennant. If that candle trades mostly above the upper border, I will use the preceding candle’s low instead. I will ignore bearish breakouts from this bullish pennant. You can see a bigger screenshot by clicking on the chart:

GBP/CHF - Bullish Pennant Pattern on Daily Chart as of 2018-09-16

I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this GBP/CHF pattern. You can trade it using my free Chart Pattern Helper EA.

Update 2018-09-17: The pennant had been broken and my entry has triggered at 05:56 GMT today. The long position opened at 1.26633 with stop-loss at 1.26202 and take-profit at 1.29491. Although the risk-to-reward ratio here is very nice, the breakout itself is very weak — the currency pair can easily revert to the pennant’s range.

GBP/CHF - Bullish Pennant Pattern on Daily Chart as of 2018-09-17 - Post-Entry Screenshot

Update 2018-09-18 11:55 GMT: The breakout activity was not right at all in this case. The stop-loss has been triggered just some 3 hours ago at 1.26202.

GBP/CHF - Bullish Pennant Pattern on Daily Chart as of 2018-09-18 - Post-Exit Screenshot

If you have any questions or comments regarding this bullish pennant on the GBP/CHF chart, please feel free to submit them via the form below.

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