GBP/CHF is knocking on a key technical resistance level after yesterday’s market moves.
Will we see an upside breakout this week? Or will the bears step in to maintain the pair inside a long-term range?
We’re taking a better take a look at the 4-hour chart for clues!
GBP/CHF 4-hour Forex Chart by TradingView
The British pound found buying pressure yesterday, thanks partly to the U.K.’s flash December PMIs hinting at sticky high price pressures that might make the Bank of England (BOE) think twice about aggressively easing its monetary policies.
However the PMIs also brought out worries concerning the labor market and overall demand for manufactured goods. Meanwhile, if the U.S. dollar extends its decline, refuge alternatives just like the Swiss franc could see increased buying pressure in the subsequent trading sessions.
Do not forget that directional biases and volatility conditions in market price are typically driven by fundamentals. If you happen to haven’t yet done your homework on the British pound and the Swiss franc, then it’s time to ascertain out the economic calendar and stay updated on each day fundamental news!
GBP/CHF, which has been trading in a 250-pip range, is knocking on the 1.1350 range resistance within the 4-hour timeframe. What’s more, the wicks on the pair’s most up-to-date candlesticks point to limited demand across the technical resistance level.
Are GBP/CHF bulls just taking a breather? Or will the bears step in to defend the resistance zone?
We’re looking out for bearish candlesticks that may lead to a possible retest of the 1.1300 psychological handle.
And, if the rejection on the range resistance is backed by momentum, we could also see a return to the 1.1250 Pivot Point and mid-range levels where the 100 and 200 SMAs are hanging out.
Then again, bullish candlesticks and sustained trading above the R1 (1.1344) Pivot Point line could attract GBP/CHF buyers and push the pair to higher areas of interest like 1.1400 or 1.1500.
Whichever scenario plays out, have in mind that catalysts just like the U.K.’s jobs data, CPI release, and the BOE’s December decision may affect GBP/CHF’s price motion this week.
As all the time, be careful for other top-tier catalysts that might impact overall market sentiment, and be sure you practice proper position sizing when taking any trades!