The GBP/CHF broke above the 100-Day SMA this week for the first time since August, and the Swiss franc is likely to hold a bearish tone over the near-term as the SNB intervenes in the foreign exchange market to stem the appreciation in the low-yielding currency.
Currency Pair: GBP/CHF
Chart: 60 Min Charts
Short-Term Bias: Flat
Analysis
The GBP/CHF broke above the 100-Day SMA this week for the first time since August, and the Swiss franc is likely to hold a bearish tone over the near-term as the SNB intervenes in the foreign exchange market to stem the appreciation in the low-yielding currency. 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 risky assets however, the recent rise in market sentiment paired with long-term expectations for higher interest rates in the U.K. could lead the pair higher over the near-term. Over the next few hours of trading, we may see the GBP/CHF attempt to push higher but nevertheless, as the Bank of England is expected to hold the benchmark interest rate steady at 0.50% and is likely to instill a dour outlook for growth and inflation, comments following the rate decision could drag on the exchange rate as the economy faces its worst economic downturn in over half a century. Furthermore, as RSI approaches overbought territory, gains are likely to be capped, and we may see the pound-franc fall lower 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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