British Pound vs Swiss Franc Technical Forecast
GBP/CHF- Multi-Week High
Last week, GBP/CHF hit a five-week high of 1.1937. However, the price declined after and closed a weekly candlestick with a Doji pattern, highlighting bull’s indecision.
Alongside that, the Relative Strength Index fell from 53 to 44 and signaled bull’s lack of momentum to rally the price further.
GBP/CHF Daily PRice CHART (July 20, 2018 – JULY 31, 2020) Zoomed Out
GBP/CHF Daily PRice CHART (March 10 – July 31, 2020) Zoomed In
On June 30, GBP/CHF climbed back to the current 1.1715 – 1.1925 reflecting a weaker bearish sentiment. Yesterday, GBP/CHF closed above the 50-day moving average indicating a shift in favor of bull’s control. As a result, the price has rallied today to an over six-week high at 1.1968.
A daily close above the high end of the current trading zone may encourage bulls to start a rally towards the monthly resistance level at 1.2092 ( October 2019 Low).
On the other hand, a failure in closing above the high end of the zone could reverse the price’s direction towards the low end of the zone ( March 2020 High).
GBP/CHF Four Hour PRice CHART (June 10 – July 31, 2020)
On Tuesday, GBP/CHF traded above the downward sloping trendline resistance and generated a bullish signal which has thus far held.
To conclude, while bulls have the upper hand a break below the bullish trendline support originated from the July 28 low at 1.1798 may keep bearish potential alive. Therefore, a break below 1.1877 may send GBPCHF towards the 1.1800 handle, while a break above 1.1979 may cause a rally towards the June 16 high at 1.2037. As such, the support and resistance levels marked on the four-hour price chart should be considered.
Written By: Mahmoud Alkudsi,Market analyst
Please feel free to contact me on Twitter: @Malkudsi
