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- GBP/CHF still bouncing along hard floor at major trendline

- Likely to continue with risk of breakdown

- Chinese data and global risk trends Franc drivers

The Pound-to-Franc exchange rate is trading at around 1.2383 at the time of writing and has entered its tenth down week in a row. Studies of the charts indicate the pair is finding support on a major floor and its sideways trend will probably prolong over the next few days.

The 4-hour chart shows the pair having found a hard floor at the level of a multi-year trendline. It spent last week going sideways along the trendline and it will probably continue in this mode. The parameters of the probable sideways range lie between 1.2500 and 1.2385.

Given the strong prior downtrend, however, the bias may still be for further declines, and there is a chance of an eventual break below the trendline in the direction of the broader downtrend.

A break below the trendline and the 1.2325 level would probably provide confirmation of clean break and a continuation down to an initial target at 1.2245, the January 3 lows.

The RSI momentum study in the bottom pane suggests bearish momentum for a break is lacking, however, lessening the risk of a downside break.

The 4-hour chart is used to analyse the short-term trend, which is defined as that encompassing the next 5 trading days.

The daily chart shows the pair in a clearly established downtrend which has found temporary support at the trendline but due to its prior bearish bias will probably continue lower eventually.

A drop to the January lows at 1.2245 level is predicted initially, followed by a continuation down to the next stopping point at 1.2100.

The daily chart gives us an indication of the medium-term outlook which includes the next couple of weeks to a month.

The weekly chart shows the long-term trendline more clearly.

Assuming the exchange rate eventually breaks below the trendline - by no means a given - the trend will probably extend itself down to a target at 2016 lows at 1.1785, at last over the long-term, which is the timeframe we use the weekly chart to analyse, also defined as the next couple of months.

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