Since skyrocketing higher on news of the Swiss franc peg back in the beginning of the month, the GBPCHF currency pair has been restricted to a relative 100 pip range.  Support continues to remain at the 1.4000 for the pair, with resistance above at 1.4100.

This resistance barrier is once again being tested in the short term, which could present a formidable short opportunity.  But, first, the pair will have to break higher from the 1.4050 resistance that it is now testing.  Technical oscillators are showing a likely failure of this point – with Stochastic already turning lower from an overbought indication, trading at 53.23.  Moving Average Convergence/Divergence or MACD is additionally showing a bearish divergence, a bearish indication of things to come.

The 1.4050 barrier is being reinforced by an ascending trendline from 1.3729 to 1.3891.

GBPCHF 15-minute time frame – Source:  FXAlliance Charts

As a result, in the 15-minute time frame, we anticipate a near term retest of 1.4000 support as we head into afternoon trading.  Should the support level fail to hold, we anticipate a decline through till the 1.3970 current session low and even further to 1.3917, a level not seen since last week.

But, should the current bullish momentum hold, medium targets will likely be set at 1.4123 spike high witnessed on September 22nd following a penetration of the topside 1.4100 resistance level.