Pound tests major support
Both levels 1.2818 and 1.5524 have assured their significance, serving as strong support and resistance for GBP/CHF for the last five years. The monthly chart shows that the pair has just bounced from the support line, in a successful battle against various period SMAs which put significant bearish pressure on the currency pair. What proves the aforementioned support to be even stronger is the pair's inability to break the level during the Brexit plunge as well as the months following it.
Monthly Chart:
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One channel to be eliminated
On a shorter time-frame, however, the pair forms what appears to be a channel in the making, attempting the upper trend-line at 1.3087 at the moment. In case the rate fails at this trend-line once more, the channel will be reasserted for future developments. However, on its way up towards the channel top trend-line, the pair has developed another – junior – channel, which it could maintain in case the senior one is broken. On the other hand, if the superior channel does hold and GBP/CHF continues its way south, the month might close under the major support level, implying that the Pound could underperform the safe haven currency to a level that has never been seen before.
Daily Chart:
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In case the pair breaks the senior channel pattern, monthly R1 at 1.3128 will be the near-term resistance, from which it could undergo a consolidation of the upper channel boundary, bouncing off to the 100-day SMA and R1 cluster at 1.3335 or returning to the junior channel at around 1.3200/3300. If the superior channel holds, however, the rate will attempt the monthly resistance at 1.2818 on its way to 1.2484 which corresponds to the superior bottom trend-line.
4 Hour Chart:
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A positive fundamental surprise on the UK Services PMI managed to induce some upside volatility into the market, but not enough to move the currency pair outside of any of the patterns. Retail sales monitor data could bring some surprises that might shake up the market a little more.
Technical Indicators:
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