The GBP/CHF pushed higher this week as investors moved into higher risk/reward investments, and the pair is likely to hold a broad range going forward as the Swiss National Bank pledges to stem the risks arising from the appreciation in the low-yielding currency.
Currency Pair: GBP/CHF
Chart: 60 Min Charts
Short-Term Bias: Flat
Analysis
The GBP/CHF pushed higher this week as investors moved into higher risk/reward investments, and the pair is likely to hold a broad range going forward as the Swiss National Bank pledges to stem the risks arising from 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, and the pair should continue to trade sideways over the near-term as fundamental headwinds continue to weigh on the exchange rate. Over the remainder of the week, we may see the GBP/CHF attempt to push higher as market participants remain hopeful that the G20 summit will help to restore confidence in the financial system however, as the pair remains overbought, gains are likely to be capped, and we may see the pound-franc work its way towards the lower-end of its range over the following week to fill-in the gap from the 120 SMA as the economic docket for the U.K. is expected to show a weakening outlook for growth and inflation. As a result, if the fundamental outlook continues to foreshadow a deepening recession in the region, we may see the pair break below the moving average to make a run for 1.5950-60 (78.6% Fib). Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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