(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; horizontal support/resistance levels in yellow; chart pattern in dotted yellow; 50-period simple moving average in light blue.)
3/07/2008 â€“ GBP/CHF â€“ For the past seven months or so, plummeting price action on the GBP/CHF daily chart, as shown, has been characterized by fast and deep drops interspersed with periods of consolidation. These consolidation patterns have appeared variously as large triangles and a tight horizontal trading range, as is evident on the accompanying chart. The most recent consolidation formation following yet another price drop a week or so ago is appearing tentatively as an inverted flag pattern (represented on the chart in dotted yellow) characterized by low volatility. Since flags often serve as relatively reliable continuation patterns, there is somewhat of a downward directional bias for the eventual break of this flag. This is especially the case in light of the fact that the current long-term trend for the pair is unmistakably down. If a downward break of this flag indeed occurs as might be expected, there is not much in the way of known support to the downside as price has not hit these depths for over a decade.
Chief Technical Analyst
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