By: Mike Kulej
After a seemingly endless bull market, the British Pound – Swiss Franc pair have staged a rally this year. From the all time low of 1.4398, the GBP-CHF advanced to almost 1.5700 in a span of a few weeks. Now this rally is in question.
During the last few days, the price started a correction. Quite normal after a sizeable move. Unfortunately, this sell off accelerated on Tuesday, and the GBP-CHF broke through couple of important support levels. One is the 100 SMA while the trendline is the other.
GBP-CHF Simplified
Breaking a trendline is often a first technical sign of a trend reversal. However, it needs additional confirmation using principles of the price swing analysis, that comes in form of taking out the next support/ resistance created by the most recent minor low/high.
In the case of the GBP-CHF, the next support is the low of 1.4860 established in late January. If the price moves under that level, the uptrend will be officially over, at least until another reversal takes place. Of course, if the GBP-CHF moves back above the trendline, we can consider the uptrend re-established.