By: Mike Kulej
The GBP-CHF pair is in the process of building a symmetrical triangle on an intermediate term chart. Price swings for this pair have been getting smaller for a couple of weeks now, pointing to an indecision among market participants. Other technical indicators, like the Standard Deviation and the Stochastic Oscillator also reflect a flat market. Their readings are neutral. Current emergence of the symmetrical triangle suggests a strong possibility of the market preparing to make a move. Chances are that the breakout will happen as early as on Tuesday, May 18. Since symmetrical triangles do not have directional bias, the next price swing could go either way. However, size of the triangle provides clues as to the extent of the move. If the price breaks out to the upside, 1.6540 is very attainable. On the downside, the support of 1.6260 provides a decent objective. One should bear in mind that the Swiss National Bank is dissatisfied with the strength of the Franc and has threatened intervention. The intervention would be aimed at the EUR-CHF pair, but its effect will spill over to all CHF crosses. However, it is unlikely the SNB will take any immediate action.