FxWirePro: GBP/CHF extends weakness below weekly cloud, eyes 78.6% Fib at 1.2227, stay short

GBP/CHF chart on Trading View used for analysis 

• GBP/CHF is extending weakness below weekly cloud, breaks 61.8% Fib support.
   
• Weak UK construction PMI for the month of August disappointed market expectations, weighing on the pound.
   
• Seasonally adjusted HIS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) eased from July’s 14-month peak of 55.8 to 52.9 in August (still above the crucial 50.0 mark). 
   
• 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. 
   
• We see minor support at 1.2455, break below to see resumption of weakness. Breakout above 55-EMA to see upside till 200-DMA.

Support levels - 1.2455 (trendline support), 1.2227 (78.6% Fib)

Resistance levels - 1.25 (5-DMA), 1.2575 (61.8% Fib), 1.2868 (55-EMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-GBP-CHF-fails-at-2H-110-EMA-good-to-go-short-on-upticks-1419430) has hit all targets.

Recommendation: Stay short on break below 1.2455, SL: 1.2575, TP: 1.23/ 1.2230

FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -99.8418 (Bearish), while Hourly CHF Spot Index was at -10.1726 (Neutral) at 1045 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.