GBP/CHF – 1.2960
Sterling found decent demand at 1.2343 earlier this month and has rallied very strongly, price even penetrated previous resistance at 1.3069, signaling early erratic rise from 1.1475 has resumed and upside bias is seen for this move to extend further gain to 1.3100, then previous resistance at 1.3208 but near term overbought condition should prevent sharp move beyond 1.3300 and reckon 1.3526 (previous support) would remain intact, bring retreat later.
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, as price has retreated after rising to 1.3078, suggesting consolidation below this level would be seen with initial downside bias for pullback to 1.2900, however, reckon 1.2800-10 would limit downside and bring another rise later. Only below support at 1.2716 would defer and suggest a temporary top is formed instead, bring correction to 1.2650-60 and later towards 1.2600 before prospect of another upmove.
Recommendation: Buy at 1.2800 for 1.3100 with stop below 1.2700.
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.
