The pair fell heavily on the backdrop of COVID-19 as the Swiss Franc found safe-haven flows and the British Pound lost attraction on bids.
The pound has actually lost around 1,700 pips against the Swiss Franc in 5 weeks of intense trading, starting Feb 17. The pair, however, rebounded last week and is likely to continue building momentum in the coming week (s).
While the current correction phase might be able to take the pair to test the 1.2130 weekly break structure, we are going to focus on the shorter-term view.
The daily chart above indicates a close back above strong previous support that had turned into resistance on a prior break. While we maintain a footing above this support, we could easily test the next breakout structure (Blue trendline) on the daily chart.
This bull target also coincidentally matches the downward channel (top red) trendline.
The 2-hour chart below shows price breaking higher from the downward resistance patch (red trendline,) making a swift recovery. It also suggests we have a new bull channel (channel within the blue trendlines) that could maintain the bullish price action.
We can expect any initial move around the mid 1.19 handle to provoke retraces. A potential swing can then come into play as indicated by the arrows on the chart.
The 2-hour chart also points at a support in the extension of the daily support which stretches as low as the 1.1600/10 handle.
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