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Special Focus

GBPCHF: Risk Builds To The Downside.

GBPCHF – With a loss of upside momentum at the 1.5078 level triggering weaknesses and then consolidation, risk of further weakness cannot be ruled.This is coming on the back of a failed attempt to yield further upside gains above the 1.4702 level. Having wiped out its Thursday losses during the Monday trading session, further price extension is set to develop towards the 1.4298 level, its 2011 low with a loss of that level resuming its broader long term downtrend. Further down, support stands at the 1.4200 level with a break will aim at the 1.4100 level and subsequently its big psycho level at 1.4000. Alternatively, GBPCHF will have to break and hold above the 1.4702 level to prevent further downside weakness now setting up. If triggered, more upside gains should build up towards the 1.4857 level, its Jan 25’2011 low. We expect a reversal of roles as resistance to occur at this level and then turn the cross back down in the direction of its primary trend. Further recovery if seen will expand gains towards the 1.5199 level. All in all, GBPCHF remains pressured to the downside long term as it looks to weaken further.