By: Mike Kulej
While everybody is focused on new all time lows made by the US Dollar against other currencies, the GBP-CHF has also reached a new price extreme. It has been slipping in a steady, not very dramatic, downtrend all the way to 1.5090.
This undercut the previous all time low of 1.5118 established in December 2008, during the peak of the financial panic. For this pair to continue the downtrend, it needs to close under that low on weekly bases a convincing margin, perhaps 30-50 pips. That might be difficult. We should expect some price support at this level, especially considering that the speed of the sell off slowed down considerably.
While the slope remains steep, the last few candlesticks have been getting smaller and not closing near the lows, a sign of possible trend exhaustion. Some technical indicators suggest an increased probability for a bounce soon.
The MACD shows a strong divergence, not confirmed yet, and the weekly Stochastic are once again at an oversold level. If the GBP-CHF develops a reversal candlestick formation and moves above this tight trendline, the reversal would be confirmed.
