Technical Analysis – GBPCHF remains bullish, although 1.2935 denies further gains

Anthony Charalambous, XM Investment Research Desk

GBPCHF looks to be holding onto its positive stance despite deflecting off the 1.2935 resistance from May 21. Backing this, are the upward-sloping simple moving averages (SMAs) and the Ichimoku cloud.

On the other hand, the pause upwards is aided by the flat Tenkan-sen and Kijun-sen lines as well as the short-term oscillators, which reflect easing in the positive momentum. The MACD, in the positive region has dipped below its red trigger line, while the RSI has retreated before claiming the 70 level.

If the buyers retake the reins and overtake the 1.2935 resistance, the nearby 1.2990 level – which is the 76.4% Fibonacci retracement of the down leg from the 1.3400 to 1.1671 – could halt a further climb towards the 1.3130 inside swing low from April 25. If buying persists, the 1.3250 resistance may be next to challenge the bulls ahead of the 1.3400 peak.

Alternatively, if sellers manage to push lower, immediate support could come from the 20-day SMA at 1.2793 ahead of the 61.8% Fibo of 1.2738, where the 40-day SMA also lies. Penetrating below, the recent low of 1.2673 may stop the drop towards the 50.0% Fibo of 1.2535. Underneath that level as well, the next obstacles are the 1.2476 and 1.2400 inside swing highs.

Summarizing, the short-term bias is neutral-to-bullish and a break above 1.2935 would reinforce the outlook. However, a break below 1.2673 could increase the odds for further declines.