GBPCHF tries to find resistance after recoveryPOUND STERLING OANDA:GBPCHF ANALYSIS
- Enough US data to go around this week: ADP, services PMI and NFP
- GBP/CHF attempts to find resistance as the pair recovers from overbought territory
THERE’S ENOUGH US DATA TO GO AROUND THIS WEEK
There is a lack of UK data this week, but it shouldn't be ignored for sterling-related pairs. FX movements increased in Q1 and central banks are now considering interest rate cuts. The question is when will they have the confidence to start.
In contrast, US data has been plentiful. ADP data added to the strength seen in the job market. US services PMI data contributed to the dollar's short-term pullback after declines in "new orders" and "prices" in March, resulting in a moderate headline reading of 51.4. There is significant Fed speak today, with Jerome Powell standing out.
OANDA:GBPCHF ATTEMPTS TO FIND RESISTANCE AS THE PAIR RECOVERS FROM OVERBOUGHT TERRITORY
Now that the Swiss National Bank (SNB) surprised markets with a 25 basis point cut in March, the Swiss Franc appears vulnerable. However, since the SNB meeting, GBP/CHF has failed to trade above the March 21st high, witnessing long upper wicks which ultimately fell short of the mark.
The pair also attempts to recover from overbought territory and so there may be room for a shorter-term pullback should bears pile in from here. The gold overlay is the yield differential for the pair (GB 10 year bond yield -Swiss 10 year yield) and has helped, to some degree, explain the path of the pair.
Support sits at the recent swing low around 1.1345 with resistance at 1.1487.
