GBP/CHF chart on Trading View used for analysis
- Pound spiked yesterday as Germany and the UK both expressed a willingness to drop key requirements from their Brexit negotiations.
- It later trims daily gains across the board after German officials denied Brexit concessions.
- Earlier on Wednesday, UK’s Service PMI came in above estimates at 54.3 for the month of August lending support to the pound.
- Long-term trend in the pair remains bearish, price action below cloud and major moving averages.
- The pair is extending weakness after being rejected at 200-W SMA. Technical indicators on weekly charts are highly bearish.
- Break below 61.8% Fib has raised scope for further weakness. Test of 78.6% Fib at 1.2227 levels looks likely.
- The pair is holding support at 1.2455, break below to see resumption of weakness. Breakout above 55-EMA to see upside till 200-DMA.
Support levels - 1.2524 (5-DMA), 1.2455 (trendline support), 1.2227 (78.6% Fib)
Resistance levels - 1.2575 (61.8% Fib), 1.2648 (21-EMA), 1.2846 (55-EMA)
Recommendation: Stay short on break below 1.2455, SL: 1.2575, TP: 1.23/ 1.2230
