Technical Perspective: GBPCHF

GBPCHF CROSS as of June 26, 2012

As a matter of due diligence; it would be good to check what the USDx levels were when the EURUSD was at the 1.2380 and compare it with the GBPUSD & the USDCHF. As a contrary strategy to the EURUSD position above is to be able to sustain this position by using the GBPCHF cross rate as the chosen pair which is in line with the USD continued recovery from its previous correction. Likewise, such a strategy would absorb any adverse price fluctuation in both directions as a cautionary position while maximizing the market potential for a USD rally in the medium term time frame.

Although, the technical outlook remains bearish due to the daily double top formation, not to mention a triple top high at the 1.4968 which serves as the 1st resistance price levels for the sessiion to session trading. While the relative support at 1.4920/25 should be well intact as the USDx moves higher and USDCHF may remain at its current levels but not lower than the support at the 0.9575.

The higher lows ascending to a steeper trend defines its bullish mid-term rally inspite of the technical resistance. Extensions to the high would be viewed at the 1st level of 1.5035/50 within the mid-week. Meanwhile, R2 would be at the range of 1.5150 - 1.5200 once volume builds for a continued USD rally. Session to session pullback reactions would also be expected as corrective moves no lower than the 1.4920 would be ideal for a medium term trade plan.And this would also serve as a position hedge versus any USD decline which would influence and delay the Euro's eventual downtrend.