The British pound continued to weaken against the Swiss franc and held below the 50-Day moving average during the last two days of trading however, the GBP/CHF may retrace the sell-off from earlier this month as the economic docket for the U.K. is expected to reinforce an improved outlook for future growth.
[B]Currency Pair:[/B] GBP/CHF
[B]Chart:[/B] 60 Min Charts
[B]Short-Term Bias: [/B]Flat
[B][U]Analysis[/U][/B]
The British pound continued to weaken against the Swiss franc and held below the 50-Day moving average during the last two days of trading however, the GBP/CHF may retrace the sell-off from earlier this month as the economic docket for the U.K. is expected to reinforce an improved outlook for future growth. After reaching a high of 1.8976 in November, the pound-franc slipped to a low of 1.5124 on 12/29 following the rise in risk aversion, but the turnaround in market sentiment has led the pair higher throughout the first half of year, and the pair may continue to trend higher over the near-term as investors anticipate the Bank of England to tighten policy over the next 12 months. The BoE Minutes for the July policy meeting encouraged an improved outlook for the economy as the central bank expects 2Q GDP to contract less than it had initially expected and projects economic activity to expand towards the end of the year, and long-term expectations for higher interest rates in the U.K. may support the British pound over the coming months as market sentiment improves. Nevertheless, over the next few hours of trading, we may see the GBP/CHF retrace the overnight decline as economists anticipate retail sales in the U.K. to rise 0.3%in June, and the data could spark a rally in the British pound ahead of the GDP report due out on Friday at 8:30 GMT. As a result, we may see the pair fill-in the gap from the 120-SMA at 1.7594, and may make another attempt to break above 1.8150-60 (78.6% Fib) as growth prospects in the U.K. improve. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
[I][B]Visit the [/B][/I][I][B]DailyFX Forex Stream[/B][/I] [I][B]for Real-Time News and Market Updates[/B][/I]
[I]To contact the author of this article, please email: <[email protected]> [/I]
[B][I][I] Related Articles:[/I][/I][/B]
[B][I][I]Sterling Weighed Down Despite Upbeat Minutes (Morning Slices)[/I][/I][/B]
[I][B]Euro Potential Support Begins at 1.4050[/B][/I]
[I][B]Dollar on The Verge of Collapse as Earnings Ease, Growth Firms[/B][/I]
[I][B]Yen Crosses: Impressive Rallies Meet Resistance[/B][/I]