GBPCHF Price Breaks Below Trendline Support, May Fall Further
GBPCHF price and technical analysis:
- GBPCHF has dropped through trendline support in place for almost a month.
- Now further losses are possible.
GBPCHF in danger of weakening
The GBPCHF cross rate has dropped below support from a rising trendline that has been in place since September 21, suggesting that a further decline is now possible.
The break occurred at the start of this week and the price has steadied since. To confirm that the rally is now over, the exchange rate will need to break convincingly below the 1.30 “round number” level where it is sitting currently but that could happen in the next few days.
GBPCHF Price Chart, Daily Timeframe (July 2 – October 18, 2018)
If it does, the first target will be Monday’s low at 1.2946, followed by the 1.2936 level where the 20-day moving average currently sits. Longer-term, the obvious target is the low just above 1.25 touched on September 21 but both the 50-day and 100-day moving averages would need to be taken out first.
To the upside, there is resistance at 1.3144 where the old support trendline now sits, and before that at 1.3116, the high reached on October 12.
From a fundamental perspective, there is a chance that after the failure of the Brexit negotiations between the UK and the EU this week, GBP will come under downward pressure. On the other side of the cross, CHF would likely benefit if “risk-off” sentiment persists in the markets.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.