The GBP/CHF, not unlike the USD/CHF has been trading in a descending channel since July 22 when it reached the high for 2012 at 1.5479, a level not seen since February 2011. Being the high for 2012, we have since been falling with pretty straight forward pull backs and have formed a descending channel as a result. The pair reached its lowest level since June 2010 on Friday at 1.46898 and effectively breaking the previous low set on December 28, 2012. Unlike the EUR/USD which has clearly establish a new high and closed above its corresponding high, the GBP/CHF and USD/CHF both still have some work to do if the bears want to take this pair lower. We have now formed a double bottom which intersects with the bottom of the descending channel just shy of the Monthly S1 at 1.4685. This is now the key to this pair's descent. The bears must now close below 1.4685 in my opinion, otherwise we will probably see prices reverse to test the top of the channel once again. If we do get below 1.4685, we have a clear shot to 1.4500, the highs from early 2012. As there is little in the form of news announcements on the Swiss Franc until Wednesday, the focus will be on Bernanke on Monday, along with British CPI numbers and the BOE Inflation Letter on Tuesday. While consumer spending in Great Britain is not expected to improve, any numbers better than anticipated could give the sterling strength and force the bears to put a hold on their advance. If price does in fact turn bullish, look for resistance from 1.4750 and 1.4790 area's with the 62 day moving average at 1.4925 offering solid resistance as well. The top of the channel will be the likely target for the bulls, which intersects with the Weekly R1 at 1.4960.
Happy Trading