By: Mike Kulej
The British Pound has been among many currencies, which fell hard in relation to the Swiss Franc. Just like the Euro and the Dollar, the Pound sank to an all time low, recently extending to 1.4398. On Tuesday, however, the GBP-CHF rebounded significantly in the largest single daily gain since October.
Does it mean that the bearish trend has run its course? Trying to estimate bottoms/tops at all time price extremes is notoriously difficult. It is literally an uncharted territory, without old supports/resistance s for guidance. In case of the GBP-CHF, the downtrend is not broken yet.
For that to happen, the price must move above the most recent resistance, which is the minor high of 1.4892. In addition, the down trendline has to be broken, too. So far, the price has moved into the vicinity of both these obstacles, but still remains on the bearish side.
Other technical indicators had been oversold, but moved up together with the price on its almost 400 pips advance in one day, which is a positive sign. Now the resistance levels of the last high and the trendline should be watched closely for additional signs of a possible recovery in the GBP-CHF.