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GBP/CHF Setting up for a Breakout Trade

GBP/CHF has been bullish in 2014. We can look at GBP/CHF as inversely correlated to EUR/GBP, because EUR and CHF are positively correlated. 


(gbpchf 4h chart, 6/10)

Now, GBP/CHF has been bullish in 2014, and recently found resistance at 1.5120 in April. It has been ranging. May 4 price action expanded and reestablished the range to be between 1.5130 and 1.4963. 


(GBP/CHF daily chart)

If the break is to the upside, note that it will open up new highs on the year. The daily chart shows that the 1.5123 was the January and previous 2014 high before price spiked to 1.5130 in May. This move would open up the 2012-high at 1.5465.

A break below 1.4960 however breaks below a rising trendline and first opens up the 1.49-1.4905 support/resistance pivot. Below that, the next support levels seen in the daily chart are:

1.4765
1.4628
1.4467

Because of the prevailing bullish bias, let's first watch for support around 1.49. But if that breaks, we should limit the bearish outlook to 1.4765, which is between the 50% and 61.8% retracement level. Also look for the daily RSI to turn up above 40 to be a sign of bullish continuation.