Intervention in the currency market by the Swiss National Bank has sparked increased volatility for the Swiss franc, and the GBP/CHF may continue to push higher over the month as investors raise their appetite for higher-yielding assets.
Currency Pair: GBP/CHF
Chart: 60 Min Charts
Short-Term Bias: Flat
Analysis Update
The GBP/CHF continued to push higher even after the dismal retail sales report, and may work its way towards the top of its range over the remainder of the session as investors continue to moving into higher-yielding currencies. Over the next few hours of trading, we may see the pound-franc make a run for 1.6540-50 (38.2% Fib) as it works its way towards the top of its range however, as the fundamental event risks scheduled for the next 24 hours is expected to show a weakening outlook for the global economy, a rise in risk aversion is likely to weigh on the British pound, which could lead the pair to fall towards short-term support at 1.6250-60 (50.0% Fib).
Analysis
Intervention in the currency market by the Swiss National Bank has sparked increased volatility for the Swiss franc, and the GBP/CHF may continue to push higher over the month as investors raise their appetite for higher-yielding assets. Nevertheless, as market participants expect the U.K. to face a deepening economic downturn, fundamental headwinds are likely to hold the pound-franc within a broad range as the global economy heads into a recession. After falling to a low of 1.5124 in December, the GBP/CHF bounced back to reach a high of 1.7489 in February, but the lack of momentum to push back above 1.6960-70 (21.4% Fib) suggests that the pair may continue to move sideways over the remainder of the month as investors remain skeptical of the extraordinary efforts taken on by the SNB and BoE. Over the next few hours of trading, we may see the pound-franc continue to push above the 120 SMA however, as retail spending in the U.K. is expected to fall for the first time in four months, a weakening outlook for Europe’s second largest economy is likely to weigh on the exchange rate, which could lead the pair to fall back towards 1.6250-60 (50.0% Fib). Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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