The British pound has been one of the best performers in recent times against many major currencies, including the Swiss franc. The GBP/CHF pair has managed to clear a few important resistance levels on the weekly time frame, which has opened the door for a test of the previous high of 1.5450. The fundamentals also support the British pound for more gains in the medium term. If the GBP/CHF pair manages to climb towards the 1.5450 level, will it be able to break out?
One important thing to note here is that the pair has settled above the 61.8% Fibonacci retracement level of the last drop from the 1.7064 high to the 1.1462 low. This can be considered a bullish sign, as it is even possible that the pair might head towards the full 100% extension in the medium term. However, the recent crisis has the potential to increase safe haven demand. In that event, the Swiss franc may gain some bids against the British pound.
On the downside, if the pair retraces from the current levels, then the 1.50 level may act as support. Moreover, the 100 and 200 weekly simple moving averages are also sitting around the 1.4800 level, which can be seen as a medium term support area.
The RSI on the weekly time frame is heading towards extreme levels, which may coincide with a test of the 1.5450 level. If this happens, then the pair may retrace or correct from the mentioned resistance zone. We will see how the pair trades in the coming weeks, as the market prepares for upcoming risk events.
- IKOFX Technical Team
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