Technical Analysis of GBP/CHF for May 04, 2016
Technical outlook and chart setups:
The GBP/CHF pair dropped lower yesterday hitting 1.3815/20 levels before pulling back. The pair has dropped beyond our expectations but still remains bullish. Watch out for a reversal around these levels before committing to long positions again. The wave structure indicates that the pair has dropped from 1.5500 through 1.3400 levels in 5 waves. Hence the most likely direction is a 3 wave corrective rally through fibonacci 0.618 resistance levels (1.4747). The first wave might just be complete at 1.4200/10 levels, and the drop from there could be the second leg. The third leg rally is expected to resume any moment and push the prices higher. Immediate support is at 1.3800 levels while resistance is seen at 1.4300 levels respectively.
Remain long with stop around 1.3800 levels, targeting 1.4700 levels.