British Pound Crosses Test Major Support

The GBPCHF is heading towards parallel channel support.  The horizontal line at 1.7537 is the all-time low, which the pair is now putting to the test.  The parallel support line comes in at 1.70 next week.  Beware that a bottom could form given the test of the all-time low / RSI divergence.   

There is no discernible pattern (long or short term) in the GBPCAD.  The pair is nearing long term support at 1.7668/1.8059 from the lows in 1989 and 1993.  These levels are defended by a downward sloping support line drawn off of the 2003 and November 2005 lows. 

This is one possible long term outcome.  The top that formed in 2001 above 3.00 led to a decline that can be counted as a 5 wave drop.  The massive spike from 2.0291 may be a B wave (or second wave) that will be fully retraced.  Such spikes do often mark significant turning points.

A 5 wave drop is much clearer in the GBPNZD (from 2000 to 2005).  Sideways trading since then may could be taking the form of a B wave.  This outlook favors range traders although the GBPNZD is in the middle of the multi-year range right now.

Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals  every weekday morning (9 am EST), COT Analysis (published Monday mornings), and analysis of currency crosses throughout the week.  He is also the author of Sentiment in the Forex Market.