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 keep the pair inside a long-term range?
We’re taking a closer look at the 4-hour chart for clues!
GBP/CHF 4-hour Forex Chart by TradingView
The British pound found buying pressure yesterday, thanks in part to the U.K.’s flash December PMIs hinting at sticky high price pressures that could make the Bank of England (BOE) think twice about aggressively easing its monetary policies.
But the PMIs also brought out worries about the labor market and overall demand for manufactured goods. Meanwhile, if the U.S. dollar extends its decline, safe haven alternatives like the Swiss franc could see increased buying pressure in the next trading sessions.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
GBP/CHF, which has been trading in a 250-pip range, is knocking at the 1.1350 range resistance in the 4-hour time frame. What’s more, the wicks on the pair’s most recent candlesticks point to limited demand around 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 on the lookout for bearish candlesticks that could lead to a potential retest of the 1.1300 psychological handle.
And, if the rejection at 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.
On the other hand, bullish candlesticks and sustained trading above the R1 (1.1344) Pivot Point line could draw in GBP/CHF buyers and push the pair to higher areas of interest like 1.1400 or 1.1500.
Whichever scenario plays out, keep in mind that catalysts like the U.K.’s jobs data, CPI release, and the BOE’s December decision may affect GBP/CHF’s price action this week.
As always, watch out for other top-tier catalysts that could impact overall market sentiment, and make sure you practice proper position sizing when taking any trades!
