The British pound strengthen against the greenback following the slew of economic data from the U.K. and remains to be the best performing currency on the day after halting the four-day decline, while the Swiss franc continued to lose ground, with the exchange rate coming off of the yearly low.
The British pound strengthen against the greenback following the slew of economic data from the U.K. and remains to be the best performing currency on the day after halting the four-day decline. The GBP/USD has moved 92% of its daily ATR after reaching an intraday high of 1.5989, and the lack of momentum to break above 1.6000 is likely to hold the pair within a narrow range throughout the North American trade. As the outlook for future growth improves, the pound-dollar may continue to make higher lows and higher highs over the near-term to retrace the sell-off from the beginning of the month, and we may see the pair attempt to push back above the psychological resistance at 1.6000 over the week to fill-in the gap from the 200-SMA at 1.6032.
The Swiss franc continued to lose ground against the U.S. dollar, with the exchange rate rising to a two-week high of 1.0406 however, the two-day rally looks to be losing steam as the pair moves nearly 95% of its average true range. As a result, the dollar-franc may hold a narrow range throughout the day as the 30-minute RSI approaches overbought territory, and we may see the pair fall back over the week to cover divergence from the 100-SMA at 1.0325. Nevertheless, as the USD/CHF comes off the yearly low, a close above the 20-Day moving average could be indicative of a near-term reversal, and the pair may retrace the September decline over the following month as the economic outlook for the US improves.
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To discuss this report contact David Song, Currency Analyst: dsong@fxcm.com
