By: Mike Kulej
Earlier this month, the GBP-CHF pair set a new all time low at 1.5091. Since then it traded large sideways, within a fairly narrow range, until Tuesday when it moved strongly up, gaining about 350 pips in one day, the best performance since July.
While the major trend is still down, as shown by the main trendline, the GBP-CHF managed to break through a minor, steeper trendline, the first step in a possible reversal. By the end of the day, the price reached 1.5648, very close to a previous minor high from 09.28.2010.
This action established that level as a firm resistance, one that has to be broken if the reversal is to prove real. For the immediate future, it becomes the key level to watch. For the moment, other technicals support this upward thrust.
The MACD is nearly at the zero line, crossing of which will have bullish implications. The Momentum Indicator has risen sharply, even more than the price, which is also positive. Now, if the GBP-CHF manages to close above 1.5650, that could mark the start of a much bigger bullish price swing.
