The cross's corrective weakness deteriorated on Tuesday (highlighted in our weekly analysis) following its break and hold below its short term rising trendline(1.5284) originating from the 1.4444 level. Although now seen recovering, as long as GBPCHF continues to hold below that trendline, further corrective declines cannot be ruled out. In such as case, its .50 Fib Ret residing at 1.5032 will be targeted initially with a violation of there allowing for further declines towards its Jan 25'2011 low at 1.4857. We could see a cap at that level driving the cross back up in the direction of its short term uptrend. Its daily RSI is bearish and pointing lower supporting this view. Alternatively, to reverse its present bearishness, GBPCHF must return above the 1.5689 level. This will pave the way for more strength towards its Dec 01'2010 high at 1.5734. On further bullish incursions, we should see additional attacks on the 1.6003 level, its Nov'2010 high. All in all, the cross remains vulnerable to the downside on correction.
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