GBPCHF - Monthly long-term Overview

Given the overall weakness of swiss franc related pairs, we can expect here too from GBPCHF to follow the bearish path until its ultimate consequences, here the pair has some more room than EURCHF on monthly charts and we have several levels to watch closely, each lying at previous channel lines in confluence with Fibonacci retracements. First would be 1.4350/60, a 138.2 extension from last highs of mid-2009 to support area at 1.7600 on weekly charts; then we do not have any obstacles in the way until 1.3860/40 (138.2% Fibonacci extension from higher highs of year 2000) and further to even 1.1520 which represents the 161.8% extension.

My views here are very similar to those of the Euro versus Swiss Franc, however after and if 1.5100 is broken, 1.4920 could see a pullback to the other side of the falling wedge to retest that level, with much chances of a short-term reversal later on which could reach a previous break retest at around psychological level 1.5800 (march/july double bottom breach). On monthly it is evident that we have got plenty of room for a free fall, however price might just turn back inside the channel and do a much longer reversal if the present area of support keeps holding. Looks like small buys accumulation that can lead to a surprise whipsaw and upwards momentum after bulls gather all the orders under their wings.

Daily assessment of the charts on Friday October 15, 2010 – at market’s close.

GBPCHF	RES2	RES1	SUP 1	SUP 2	R/R	FORECAST	PRICE ACTION
Monthly	2.4982	1.6617	1.5129	1.5052	1:3	Bullish	Hammer–failed double bottom
Weekly	1.9911	1.6450	1.5129	1.5059	1:3	Bullish	Doji just above Level 1 Sup
Daily	1.7082	1.5548	1.5193	1.5142	1:1.2	Bearish-range	Slight bounce from Level 1 Sup