GBP/CHF may reach 1.4000
By Dima Chernovolov, FBS
• GBP/CHF corrects from strong support level 1.2750
• Likely to rise further to 1.4000
GBP/CHF recently reversed up sharply from the strong support level 1.2750 (which also previously reversed the price in August of 2011, as you can see from the weekly GBP/CHF chart below). Given the strong oversold reading on the weekly RSI indicator (the last time RSI went into oversold territory was in August of 2011) - GBP/CHF can be expected to rise further toward the nearby resistance level 1.4000 (former strong support which reversed the pair in 2013).
The probability of the upward correction is also increased by the fact that the pair is currently trading well below the weekly lower Bollinger Band – which tends to be followed by the sharp backward correction toward the inner area between the Bollinger Bands. The pair might reverse down after reaching the resistance level 1.4000.