GBP/CHF is currently forming a descending triangle, where it is slowly moving towards the apex. This means that the chance for a strong break through one of the sides is increasing. On one hand, the downwards moving trendline, taken from the peak of the 27th of April, still remains intact. This is still seen as a bearish sign. On the other hand, the 1.3060 zone continues to show signs of strength and is acting as very good area of support. For now, we will stay neutral and wait for a break through either of the sides.
If, eventually, a break of the aforementioned support line happens, then this could lead to further declines. The next potential area of support could be at 1.2985, marked near the low of 7th of March. Certainly, if the selling remains, then a further drop could test the 1.2945 zone, a break of which could send GBP/CHF all the way to 1.2865, which was the lowest point of March.
On the upside, a break through the previously mentioned downwards moving trendline and the 1.3180 could be a good sign for some recovery, perhaps towards the 1.3270 barrier, which acted as a strong resistance recently. That said, in order to get more bullish on this pair, we would need to see a strong break through that resistance. Such a move could initially aim for the next obstacle of 1.3320, which if broken, could set the stage for the 1.3435 zone.
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