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GBPCHF fails to hold above 1.2900

Market Analysis

GBPCHF, H4

Cable has settled in the upper 1.31s after logging a three-session high at 1.3203 during the London AM session, which extended the recovery from Friday’s one-month low at 1.3027. The pound last week posting seeing its biggest weekly decline since August 2016. Helping foster the turn higher was the ONS stats office disclosing of an error that caused an underestimation of companies’ costs data, which has given the BoE rate hike case a boost. Incoming UK data have been mixed, with above-forecast production data being offset by a worse than expected blowout in the trade deficit, and with headline strength in the BRC retail survey for September being offset by the fact that the data was largely inflated by higher prices.

However the cross that actually took our attention against Pound, was Swissy, which got stronger today against Sterling but also agaonst US Dollar . Hence a Short term trade was taken earlier on GBPCHF.

On GBPCHF,  the Short position was triggered by the failure of the pair  to break the 50-period MA at 1.2900 on the 4- hour chart, despite the fact that tested that level 8 times the last 2 days.  Hence once a lower high fractal was confirmed, a Short position in the 4-hour chart was taken with entry at 1.2875 and Target at 1.2820, which is the upper line of the  down-channel spotted since peak on September 21. Target 2 is set at 1.2780, which is near last week’s lows. The RSI is at 44 looking weak. Support was set between 1.2915-1.2945 area.

Higher timeframes such as Daily chart confirms this weakness , since pair is still moving in the Daily Down-Channel and below 20-Day Moving average, with Parabolic SAR to remain negative September 25.

 

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Andria Pichidi

Market Analyst

HotForex

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