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This pound pair busted through the resistance level at the 1.1450 area but is now stalling near 1.1650.
Is it time for a major correction?
Take a look at this area of interest I’m watching on the 4-hour time frame.
GBP/CHF 4-hour Forex Chart by TradingView
Missed the bullish breakout and rally on GBP/CHF?
The pair might be gearing up for a correction to the confluence of support zones spanned by the 50% to 61.8% Fibonacci retracement levels.
In particular, the 50% Fib lines up with the pivot point level (1.1480) and the 1.1500 major psychological mark while the 61.% Fib coincides with a rising trend line that’s been holding since March, as well as the 100 SMA dynamic support.
What will the upcoming U.K. retail sales report bring for this pair?
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!
Number crunchers are estimating a 0.5% decline in consumer spending for April, following a flat reading in March. This would highlight how Brits are reeling from higher prices of goods lately, upping the pressure on the BOE to cut interest rates to drive inflation lower.
In that case, GBP/CHF could tumble closer to the potential support zone, which might still hold since the 100 SMA is above the 200 SMA to reflect upside momentum. If so, the pair might once again set its sights on the swing high near R1 (1.1620) or higher.
Don’t forget that SNB head Thomas Jordan has a testimony scheduled today, so his remarks might also impact CHF price action. Be careful out there!
