Technical Analysis – GBPCHF attempts to shift negative bias with new found confidence

Anthony Charalambous, XM Investment Research Desk

GBPCHF’s recent pullback seems to be struggling to decisively close above the area from the 1.1671 inside swing low – from August 2019 – to the fresh highs of 1.1717, after plotting an all-time low of 1.1109.

The short-term oscillators reflect increasing positive momentum for now. The MACD, in the positive zone, has improved slightly above its red trigger line, while the rising RSI is eyeing the 70 level. Further backing this near-term view are the stochastic lines, which are inclining, with the %K line having entered the overbought territory. That said, the bearish mode of the simple moving averages (SMAs) warns of a prevailing bigger negative picture for now.

If buyers manage to close above the 1.1717 highs, next to restrict the climb is the 1.1763 level, which is the 38.2% Fibonacci retracement of the down leg from 1.2819 to 1.1109 and the 100-period SMA overhead before the 1.1827 hurdle. Conquering these, the 50.0% Fibo of 1.1966 could interrupt the pair from seeing the area from the 61.8% Fibo of 1.2165 to the high of 1.2230, which also encompasses the 200-period SMA.

If sellers resurface, initial support could come from the 23.6% Fibo of 1.1515 and 50period SMA of 1.1490 underneath. Moving down, the low of 1.1419 could apply some friction ahead of the 1.1242 trough and all-time low of 1.1109. Diving past the bottom, the 1.1043 level could attract attention, being the 138.2% Fibonacci extension of the up move from 1.1671 to 1.3307.

Overall, the near-term appears to be gaining positive backing; however, the short-term outlook remains bearish if the price holds below 1.1763 and more importantly below 1.2165.