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Short

GBP/CHF struggling at 1.5525 resistance, buy debit put spreads

FX:GBPCHF   British Pound/Swiss Franc
118 0 1
Bearish patterns like "Shooting Stars and Spinning Top" occurred at peaks of upswings at 1.5468 and 1.5472 levels respectively that prompted us to be safeguarded against potential slumps.

Daily prices have collapsed below 10DMA again.

RSI oscillator converges to the declining prices daily graphs.

Stochastic oscillator signals indecision as there is no trace of %D line crossover even after 80 levels which is overbought territory.

Both on weekly and monthly technicals raise a caution for ongoing uptrend as prevailing upswings have not been able to break above resistance levels at 1.5570 (see circled spots in blue).

More supply side is seen at this juncture in recent past.

We think the breach decisively above these levels would take this pair to expose towards 1.6717 levels.

Otherwise, 1.5325 is a certain event (which is 23.6% fibo retracement) and steep dips towards 1.4860 can also not be disregarded on medium term basis if it does not manage to hold above resistance levels.

The previous prices did not evidence corresponding volumes as it is nearing 1.5570.

Hence, we reckon GBPCHF             should remain either in a choppy range, or expected to broadly remain under pressure with above technical resistance levels (at 1.5570), any break above these levels on closing basis creates more bullish potential but equally weaker if it doesn't hold and 23.6% retracements on southwards more likely.

Hedging views:

Having southward biased in the medium run the recommendation would be buying 2M (1%) In-The-Money -0.63 delta puts and simultaneously writing an equal number of near-month (-1%) Out-Of-The-Money puts. The delta of combined position should be at around -0.20, use shorter expiries for put writings.

This strategy is typically employed when the options trader is bearish on the underlying exchange rate over the longer term but is neutral to mildly bullish or sideways in the near term.
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