FxWirePro: GBP/CHF edges higher from new 10-month lows at 1.2768, trendline support at 1.27 in sight, stay short

Refer GBP/CHF chart on Trading View

• GBP/CHF hits new 10-month lows at 1.2768, before paring some losses to currently trade at 1.2786.
   
• Pound's decline accelerated on news that the UK Cabinet is preparing contingency plans for the UK crashing out of the EU without a deal.
   
• Fears of a no-deal Brexit coupled with dovish monetary policy outlook to keep sterling weak across the board.
   
• BoE's McCafferty reaffirmed BoE Governor Carney's call that rate hikes will be small and slow for several years.
   
• GBP/CHF has broken below 61.8% Fib and is on track to test strong trendline support at 1.27 mark. Break below will see test of 78.6% Fib at 1.2570. 
   
• Traders now await negotiations between the UK and the European Union to begin again in the coming weeks.

Support levels - 1.2745 (Oct 6 low), 1.27 (trendline), 1.2570 (78.6% Fib)

Resistance levels - 1.2845 (61.8% Fib), 1.2858 (5-DMA), 1.2979 (21-EMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-GBP-CHF-grinds-lower-after-Death-Cross-formation-next-bear-target-at-618-Fib-1412868) is approaching final targets.

Recommendation: Book partial profits at lows. Trail SL to 1.2860, hold for 1.2745/ 1.27.

FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -56.7278 (Neutral), while Hourly CHF Spot Index was at 64.8229 (Neutral) at 0430 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.