GBP/CHF in Play

GBP/CHF in Play

GBP/CHF in Play

We have 2 monetary policy announcements on Thursday -- one from the Swiss National Bank and another from the Bank of England. Of the two, the BoE rate decision will be more market moving and likely to determine the general path of GBP/CHF but both event risks are worth watching. Starting with the BoE, there’s been broad based improvement in the U.K. economy since their last meeting so chances are they will note the momentum in the economy. The door to additional will remain open of course as the central bank waits to see how the economy/markets respond to Article 50. No changes are expected from the Swiss National Bank but mixed data means they are likely to maintain an accommodative bias.

Technically, the recent decline in GBP/CHF found support at the 20-day / 50-day SMA cross. The fundamentals tell us this should hold and GBPCHF should make its way back towards 1.30. However if Wednesday’s low of 1.28 is taken out, we could see a steeper slide down to 1.27 and possibly even 1.26.

Chart Of The Day

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