By Greg Holden
The British pound has had difficulty breaching the 1.5388 price barrier against the Swiss franc lately. Over the past several days the GBP/CHF has attempted a breakthrough beyond this border, but has met staunch resistance each time.
As we can see on the chart below, most technical indicators allow us to see why the pair is struggling at this price. The price of 1.5388 represents the significant 61.8% Fibonacci retracement level for this pair.
The MACD/OsMA reveals a high-rise, bearish cross followed by a descending movement in the oscillator’s directionality. This suggests not only an impending bearish movement, but significant pressure resting atop the pair, deterring bullishness.
The Stochastic (fast) oscillator, typically an excellent gauge of short-term directionality, also provides an imminent bearish cross.
These two indicators together highlight the level of technical resistance pushing down on the GBP/CHF.
Combined with the Fibonacci level drawn on the chart below, it appears this pair, if able to break beyond this border, will likely take off in a sharp bullish run. But chances are this pair will continue to meet resistance and retrace lower towards the 1.5200 price level over the coming weeks.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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