GBP/CHF traded in a consolidative manner during the European morning Friday, staying between the support of 1.1760, and the resistance of 1.1810. That said, yesterday, the pair managed to break below the upside support line drawn from the low of June 29th, and thus, we would consider the short-term outlook to be cautiously negative.
A clear and decisive dip below 1.1760 would confirm a forthcoming lower low, but the move which could open the door to larger declines may be a break below the low of July 14th, at 1.1730. Such a move could see scope for extensions towards the low of June 30th, near 1.1660, the break of which could target the low of the day before, at 1.1630.
Looking at our short-term oscillators, we see that the RSI runs below 50, slightly above 30, and points to the downside, while the MACD lies below both its zero and trigger lines, pointing south as well. Both indicators detect downside speed and corroborate the case for some further near-term declines in this exchange rate.
On the upside, we would like to see a strong recovery above 1.1810, before we start examining the bullish case. Something like that could initially target the 1.1845 area, near yesterday’s high, where another break could carry more bullish implications, perhaps paving the way towards Tuesday’s high, at around 1.1935.
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