GBP/CHF is testing a critical technical resistance level following yesterday's market action.
Will the pair break higher this week, or will the bears defend the range once again?
Let’s dive into the 4-hour chart for insights!
GBP/CHF: 4-Hour Chart Analysis
The British pound gained buying momentum yesterday, driven partly by the U.K.’s flash December PMIs. The data signaled persistent price pressures that might prompt the Bank of England (BOE) to tread cautiously on monetary easing.
However, the PMI report also raised concerns about weakening labor market conditions and a slowdown in demand for manufactured goods. Meanwhile, further declines in the U.S. dollar could boost safe-haven alternatives like the Swiss franc in the sessions ahead.
Technical Outlook:
GBP/CHF has been trading within a 250-pip range and is currently testing the 1.1350 range resistance level on the 4-hour chart. Notably, recent candlestick wicks suggest limited buying demand around this technical resistance area.
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Bearish Scenario:
If bearish candlestick patterns emerge, we could see a potential pullback toward the 1.1300 psychological handle. A stronger rejection at resistance, especially with momentum, may even drive the pair back to the 1.1250 Pivot Point and mid-range levels where the 100 and 200 SMAs are aligned. -
Bullish Scenario:
Conversely, a sustained break above the R1 (1.1344) Pivot Point could attract GBP/CHF buyers, paving the way for moves toward key levels like 1.1400 or even 1.1500.
Key Catalysts to Watch:
Fundamental drivers remain crucial this week, with U.K. jobs data, CPI figures, and the BOE’s December policy decision all on the horizon. These events could provide the volatility needed to break GBP/CHF’s current range.
Additionally, broader market sentiment and other top-tier events may influence price action, so stay tuned to the economic calendar. As always, manage your risk appropriately and practice proper position sizing when entering trades!
