GBP/CHF – 1.2675
GBP/CHF – Circle wave v ended at 0.9106 and major correction has commenced for subsequent gain to 1.5547.
Despite falling to 1.2270 late last month, as sterling found decent demand there and has staged a much stronger-than-expected rebound, suggesting early fall from 1.3069 top has ended at 1.2241 (June low) and consolidation with upside bias would be seen for another test of this month’s high at 1.2854, however, break there is needed to retain bullishness and extend the rebound from 1.2241 to 1.2900, then 1.2950, having said that, as broad outlook remains consolidative, reckon upside would be limited to 1.3000 and price should falter well below said resistance at 1.3069.
To recap the larger degree count, the selloff from 2.4965 (July 2007) is the beginning of wave V with circle and is labeled as 1: 2.3760, 2: 2.4425, wave 3 extension ended at 1.1470, followed by wave 4 at 1.5547, the quick rebound from 0.9106 suggests wave 5 as well as entire circle wave V could have ended there, hence consolidation with mild upside bias is seen for major correction to take place, bring initial test of 1.5547 (previous 4th of a lesser degree).
On the downside, although current retreat from 1.2854 suggests initial downside risk is for pullback to 1.2600-10, reckon downside would be limited to 1.2550 and 1.2525-30 should hold, bring another rise later. Below 1.2470-75 would abort and suggest top is formed instead, risk weakness to 1.2400-10 and then 1.2350 but price should stay above said support at 1.2270, bring another rebound later.
Recommendation: Stand aside for this week.
On the Monthly chart, the longer-term count is that major downtrend is under way with circle wave I at 2.8645 (Sep 1.978), then wave II with circle at 4.6175 (Feb 1981), the wave III with circle ended at 1.7425 (Nov 1995) and followed by wave IV with circle at 2.4965 (July 2007 with a short wave C) and wave V with circle has possibly ended at 0.9106. A monthly close above 1.5547 would add credence to this view, bring major correction to 1.7000, then towards psychological level at 2.0000.
