Danske Research Team
Danske Bank A/S
GBP/CHF – bounce from intersecting trend lines points higher
Strategy summary – technically, GBP/CHF targets 1.6005; 18 November 2010 high. Further out 1.6635 warns.
The pair posted a high for 2014 at 1.5535 on 1 October (just above the previous peak in July at 1.5485), before retreating into a sideways consolidation pattern. Momentum has continued to build over this period and the market now looks set to take off higher once again. The bounce from the 19 November 1.4945 low is particularly significant as it coincides with the intersection of two major trend lines (drawn from the 1.5485/1.5125 highs and the 1.4045/1.4470 lows). The 100-week moving average has also started to turn higher, reinforcing the increasingly bullish tone.
Clearance of 1.5535 will shift focus towards targets at 1.5690 and 1.5795 next. Through here opens the way for a test of the November 2010 high at 1.6005. It would take a breach of the 25 December 1.5185 low to dampen short-term momentum but bears would need to trade back through the 1.4945 low to damage the wider structure.
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