GBP/CHF shot up earlier this week!
In case you missed it, the Swiss franc is slated to be one of the weakest currencies this week. There are no direct catalysts, but there are talks of currency intervention after the Swiss National Bank (SNB) reported higher foreign currency reserves in January.
Meanwhile, the British pound is being lowkey supported by a risk-friendly trading environment and upside surprises from the U.K.’s lower-tier data releases this week.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie 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 Daily Forex Chart by TradingView
Does GBP/CHF’s upswing have enough momentum to bust through the multi-month resistance zone in the daily time frame?
The pair looks headed for the 1.1100 psychological level after bouncing from the 1.0890 Pivot Point line. Unless yesterday’s uber bullish candlestick is a fluke, GBP/CHF could gain a few more pips before encountering legit selling pressure.
We’ve got our eyes on the 1.1000 – 1.1100 zone as it not only lines up with the R1 Pivot Point level but it’s also close to the 200 SMA in the daily time frame. More importantly, the area was a pretty consistent support back in 2023.
A clear rejection at the 1.1000, combined with a fundamental catalyst, could draw in enough sellers to send GBP/CHF back to the 1.0890 support.
But if we don’t see a sentiment-changing catalyst for GBP or CHF, then GBP/CHF may gain momentum and bust through the 1.1100 resistance area that we’ve marked. In this case, a move to the 1.1200 psychological level or 1.1300 previous area of interest may be on the table.
Good luck and good trading this one!