GBPCHF Breakdown Might Be The Real Deal

Technical Bias: Bearish 

Key Takeaways

• British pound recently broke a long term bullish trend line against the Swiss franc.
• More losses in the near term cannot be denied considering the breakdown.
• GBPCHF support seen at 1.5210 and resistance ahead at 1.5360.

The British pound tumbled against most major currencies yesterday post disappointing production data. The GBPCHF pair is under a lot of bearish pressure as the pair has breached an important support area around the 1.5350 level.

Technical Analysis

There was a monster bullish trend line on the daily timeframe for the GBPCHF pair, which was broken earlier during this week. This break can be seen as very critical because it increases the chances of a larger correction in the near term. The pair recently bounced back to test the broken trend line, but buyers failed to gain momentum above the same. 
Ahead, it might continue to act as a resistance. On the downside, initial support can be seen around the 23.6% Fibonacci retracement level of the last move higher from the 1.4467 low to 1.5436 high. However, just above the mentioned fib level lies the 50-day simple moving average, which could act as a barrier for sellers in the short term. The chance of a move towards the 38.2% fib level is more considering the recent break of the bullish trend. 



Alternatively, if the pair manages to trade higher from the current levels and closes back above the trend line, then a move towards the last high of 1.5436 might be possible. However, this scenario is less likely as the daily RSI has moved below the 50 level.

Moving Ahead

Overall, as long as the pair is trading below the 1.5360 level it could dive towards the 23.6% fib level, followed by the 38.2% fib level. The BOE interest rate decision is scheduled today, which might act as a catalyst for the GBPCHF pair.