Chart: GBPCHF, H4
The pound has lost ground not only in front of the US dollar, but also in front of the Swiss franc, which is also considered a safe heaven, even though the RBS is trying to keep it at low levels.
From Friday the British pound managed to gain 1% and brought the quotation back to 1.4500, level found right next to the down trend line. On a 4 hour time frame we can see that the price couldn’t close above this round level and draw a Shooting Star candlestick pattern. This would be a first price action signal for a down move.
Talking also into consideration the negative divergence that appeared on the MACD, we can say that a drop under 1.4450 could trigger another fall for the cable back to 1.4420. Under this local support there is nothing that could stop it to go all the way to 1.4350 or even to the Fridays lows at 1.4333.
Even though the signals are pretty bearish we should take into consideration an alternative scenario. For us this would be triggered if the price will close, on a 4 hour time frame, above 1.4500. In this case our price targets will be 1.4550 and 1.4600.