Weekly Trading Signal: GBPCHF

GBPCHF: SELL

The outlook on the GBPCHF cross was bullish until recently. In most part of February 2013, the price trended upwards, but it is noteworthy that it could not trend higher than the resistance level at 1.4473 (which means that further bullish run was rejected at that level). After this incident, the next bullish attempt failed to take the price beyond the resistance level at 1.4459, and since then, the price has been falling downwards. This week, the market has dropped by more than 130 pips. And recently, the RSI period 14 has crossed the level 50 to the downside, as the price itself has crossed the EMA 56 to the downside and closed below it (while the price drops further). There has now been a Bearish Confirmation Pattern on the GBPCHF – the beginning of a possibly long-term bearish trend. It should be noted that the Cable is very weak right now – even the GBPJPY and the GBPUSD are currently trending downwards. The extant selling pressure could take the price towards the support level at 1.3720 in the long run, whereas, any intermittent rallies are not supposed to push the price upwards beyond the resistance level at 1.4520, otherwise this analysis could be rendered ineffectual.

Chart: 4 hour

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