We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • The MACD is often used with its default setting when entering trades. However, this versatile indicator can be customized to assist traders in exiting trades too. Learn how to better incorporate the MACD into your trading strategy here: https://t.co/HnY7gzsI2q https://t.co/5F1DSvAXyy
  • What are some factors affecting $GBP as we head into 2020, quarter one? Download your Sterling fundamental forecast with @nickcawley1 here to find out: https://t.co/YfDSYSATK9 https://t.co/ANFLIuDY4J
  • Trading Global Markets new #podcast features @DailyFX Anlayst @PeterHanksFX , who discusses what assets would benefit in the next #recession. Tune into this new podcast episode hosted by @MartinSEssex here: https://t.co/Twr44cZ1GB https://t.co/llKzvZGDpQ
  • The #Euro remains weak against a range of currencies and any move higher is struggling to gain traction as the single currency continues to be sold-off. Get your #EUR technical analysis from @nickcawley1 here: https://t.co/9B2m0kmd4d https://t.co/ZENxpC59mP
  • The Indian Rupee 2020 outlook is bearish as India faces stagflation risk amid rising onion and crude oil prices. $USDINR may rise in the medium-term as the RBI defers hiking rates. Get your market update from @ddubrovskyFX here: https://t.co/lRrlZjAQDw https://t.co/mFv1EOYMjG
  • The $GBP may be on the cusp resuming a 12-year downtrend against the US Dollar as signs of topping emerge at pivotal chart resistance. Get oyur market update from @IlyaSpivak here:https://t.co/9rM3OjWmBA https://t.co/sUWcSFruHw
  • The $NZD may be on average at risk to further losses against its major counterparts such as the US Dollar and Japanese Yen. Where to for NZD/USD and NZD/JPY from here? Find out from @ddubrovskyFX here:https://t.co/OFjePKYdCb https://t.co/eo1c6QAVd8
  • $AUDJPY technical positioning hints prices may be on cusp of turning lower after a late-2019 bounce, recoupling with a dovish RBA policy outlook. Get your market update from @IlyaSpivak here: https://t.co/z84Y0V0ZtH https://t.co/wcIGO1emDw
  • The Japanese Yen has faded into 2020 as market risk appetite has held up and hit demand for haven assets. $USDJPY now challenges a key medium-term downtrend, but hasn’t topped it yet.Get your market update from @DavidCottleFX here:https://t.co/4X6vgCgkB7 https://t.co/FfCkGhtHsm
  • The $USD may fall against the Swedish Krona and Norwegian Krone if commentary from officials at the Davos forum uplift market mood and pressure haven-linked currencies. Get your market update from @ZabelinDimitri here:https://t.co/SZAG0yMu3d https://t.co/cBZj5tC0Ny
GBP/CHF Descending Channel Provides Swing Trading Opportunity

GBP/CHF Descending Channel Provides Swing Trading Opportunity

2011-03-09 19:37:00
Christopher Vecchio, CFA, Sr. Currency Strategist
Share:

The GBP/CHF pair has been steadily depreciating since June 2009, and this trend followed through late in 2010. However, in the months straddling the new year, the pair began to appreciate, jumping nearly 1000-pips in the first two weeks of January. In February, the pair touched as high as 1.5700 before hitting a low near 1.4900. It was noted last week that a smaller, ascending sub-channel had emerged over the past three-months, and while the pair did appreciate, it was unable to breakthrough significant Fibonacci resistance expressed in longer-term trends. With the short-term technical indicators tailing off Pound-favor, the GBP/CHF pair has been unable to follow through on its double-bottom pattern. Given the muted growth of the British economy, unless stated otherwise by the Bank of England, Pound strength since the low near 1.4900 at the end of February could be halted amid another rate decision in which no statement is offered, further frustrating speculators betting on a rate hike; it is worth noting that at the last meeting, however, a third member did in fact vote for a rate hike. Now, with the pair stuck along its channel’s regression, a swing trading opportunity has emerged ahead of the Bank of England’s Monetary Policy Committee meeting.

Levels to Watch:

-Range Top: 1.5470 (Trend)

-Range Bottom: 1.4600 (Trend)

GBPCHF_Descending_Channel_Provides_Swing_Trading_Opportunity_body_Picture_1.png, GBP/CHF Descending Channel Provides Swing Trading Opportunity

Charts created using Strategy Trader– Prepared by Christopher Vecchio

Suggested Strategy

  • Short: Place an entry at 1.5019 (38.2 Fibo)
  • Stop: Set the stop to 1.5229 (210-pip risk (50-SMA))
  • Target: The first target is 1.4785 (23.6 Fibo, move up stop to 1.4900), second target is 1.4398 (Yearly Low)
  • Timeframe:5 to 10 days

Trading Tip After rebounding off of 1.4900, the GBP/CHF pair failed to break through its 50.0 Fibo (the November 18 to December 30 move at 1.5209) on two separate occasions – March 1 and March 3 – the pair has been wedged below the 50.0 Fibo and above the 38.2 Fibo at 1.5019. Accordingly, the 38.2 Fibo represents the descending channel’s regression. A break below the 38.2 Fibo exposes 1.4900, a significant level of psychological resistance which the pair was unable to break on three distinct attempts this year so far. Should the pair break this, the next target is the 23.6 Fibo, and then the yearly low set on the first trading day of 2011. With the Slow Stochastic oscillator on the 6-hour chart having recently issued a sell signal, as well as the MACD Histogram differential tailing off of its bullish divergence, our bias remains to the downside ahead of tomorrow’s Bank of England rate decision.

Event Risk for the U.K. and Switzerland

While there is no data due for Switzerland, Pound-based pairs should see a spike in volatility after the Bank of England rate decision. While the key overnight interest rate is expected to remain on hold, markets will be looking for the commentary after the meeting on the central bank’s inflation expectations. Later in the week, the sentiment expressed will be confirmed or refuted as producer prices are due on Friday.

U.K. – More significant data is expected out of Britain the remainder of the week, with the Bank of England rate decision expected tomorrow at 12:00 GMT. While rates are forecasted to remain on hold, the markets will be looking at the commentary provided by the Monetary Policy Committee; the Overnight Index Swaps is showing that 86-bps have been priced in for the next 12-months, though traders are net short the Pound, according to the SSI.

Switzerland – With no significant fundamental data due for the remainder of the week, there is little event risk posed across Franc-crosses. However, next week, volatility could spike for Franc-based pairs as the Swiss National Bank has their quarterly monetary policy meeting, in which significant changes from the fourth quarter’s policy stance could be exhibited.

Data for March 6 to March 11

Data for March 6 to March 11

Date

U.K. Economic Data

Date

Switzerland Economic Data

Mar 10

Industrial Production (MoM) (JAN)

Mar 10

BANK OF ENGLAND RATE DECISION

Mar 10

BoE Asset Purchase Target (MAR)

Written by Christopher Vecchio, DailyFX Research.

To contact the author of this report, please send inquiries to: research@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.