Long-term expectations for higher interest rates in the U.K. pushed the British pound to a two-month high against the Swiss franc this week, and the GBP/CHF is likely to push higher over the following week as the economic docket for Switzerland is expected to reinforce a weakening outlook for growth and inflation.
Currency Pair: GBP/CHF
Chart: 60 Min Charts
Short-Term Bias: Flat
Analysis
Long-term expectations for higher interest rates in the U.K. pushed the British pound to a two-month high against the Swiss franc this week, and the GBP/CHF is likely to push higher over the following week as the economic docket for Switzerland is expected to reinforce a weakening outlook for growth and inflation. After reaching a high of 1.8976 in November, the pound-franc slipped to a low of 1.5124 in December as investors curbed demands for high-yielding assets however, as the Swiss National Bank pledges to stem the appreciation in the low-yielding currency, the pair may continue to push higher over the near-term as market sentiment improves. As the European economic calendar remains fairly light, risk trends should continue to dictate price action for the GBP/CHF over the next few hours of trading, and we may see the pair push higher as traders move into higher risk/reward investments however, as the RSI approaches overbought territory, gains are likely to be capped and we may see the pound-franc fall towards 1.7040-50 (50.0% Fib) over the remainder of the week to fill-in the gap from the 120 SMA. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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