The GBPCHF daily chart clearly shows a strong downtrend in place with very aggressive bearish momentum. It’s important as trend traders to wait for signs of strength to sell on in weak markets. A counter trend retracement provided a golden opportunity to do just that at the close of the last New York session.
The market regained some of its losses and retraced back up into a price level which previously acted as support. The move into this level was denied and the candle closed as a bearish rejection candle. The long upper wick demonstrates the level is holding as resistance and confirming to us price action traders this level is acting as a swing point in the trend.
If lower prices develop off the back of this bearish swing signal, we could see the next bearish extension of this downtrend.
