GBPCHF: A Prominent Downtrend Signal

By Tomasz Wisniewski|

Published: July 18 2023, 12:51 GMT+0

GBPCHF: A Prominent Downtrend Signal

Today’s technical analysis focuses on an infrequently traded pair – the British Pound to Swiss Franc GBPCHF. The pair has been stuck in a long-term sideways trend since late 2022, delineated by blue lines.

Most recently, the pair bounced off the upper limit of the sideways trend and formed a head and shoulders pattern, indicated in yellow. This pattern is now active as the price has broken the formation’s neckline, marked in black, triggering a downward movement.

The drop has accelerated, breaking through the red mid-term uptrend line. As we are now trading below both the uptrend line and the neckline, a comprehensive sell signal is in effect. The potential target for this downward trajectory sits at the lower boundary of the rectangle, specifically at 1.107. The odds of reaching this point seem quite high, given the current trend.

Of course, there’s an alternative scenario. If the price manages to return above the uptrend line and the neckline, a buy signal will be triggered. However, the probability for such a development appears to be quite low at this point.