GBPCHF has formed lower highs connected by a falling trend line that’s been holding all month. A test of this resistance area seems to be underway, as price is pulling up from the lows at 1.1223.

The Fibonacci retracement tool shows that the 38.2% level is at 1.1320, then the 50% Fib is at the 1.1350 minor psychological mark. The line in the sand for a correction might be the 61.8% Fib near the 1.1400 mark and former support area that might hold as resistance.

The 100 SMA just crossed below the 200 SMA to confirm that the path of least resistance is to the downside or that the downtrend is more likely to gain traction than to reverse. The 100 SMA is just above the trend line to add another layer of resistance.

Stochastic has a bit more room to climb before reflecting overbought conditions, but the oscillator already seems to be topping out. Turning lower would suggest that sellers are taking over and that GBPCHF might follow suit on a move down to the swing low or lower.

RSI has more ground to cover before indicating exhaustion among buyers, so the correction might keep going until the oscillator reaches the overbought zone.

The SNB surprised the markets will a 0.25% interest rate cut in this week’s policy statement, triggering a pop lower for franc pairs across the board. The central bank warned that there are risks to their inflation developments due to the recent appreciation of the currency in light of political uncertainty in Europe.

This represented a turnaround from Jordan’s earlier remarks citing upside risks to inflation estimates due to franc weakness, which then led traders to believe that the SNB was not inclined to ease again anytime soon.

Jordan also noted that they are monitoring FX developments and that they stand to be active in the market if necessary.