With downside momentum for GBP/CHFstalling near 1.5225, a 62% pullback to the last 3 week gains, as well as from close to a weekly bull trend, Tuesday’s forecast was bullish. This was confirmed with a gain of 1 ¼ Big Figs, one of the most positive days for sentiment this year. While a sequence of lower daily highs has been ended, supporting the bullish view, the rally has slowed towards this month’s 22 month top at 1.5368.
Intraday sentiment is overstretched, but with no sign yet that demand is ending, the outlook for Wednesday is to buy modestly on the open and then at 1.5320, with a stop loss at 1.5290, a pullback of half of yesterday’s gains. Targets are to 1.5400, 1.5435 and 1.5485, the 2012 high trade.