Daily Forex News and Watchlist: GBP/CHF

Who’s looking at GBP pairs ahead of the BOE’s decision?

If you are, then y’all better take a look at a potential break and retest play on GBP/CHF’s chart!

Before moving on, ICYMI, yesterday’s watchlist looked at NZD/CAD’s recent breakout for a break-and-retest opportunity. Be sure to check out if it’s still a good play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Canada Retail Sales for April 2023: +1.1% m/m (+0.2% m/m forecast; -1.5% m/m previous); core retail sales was +1.3% m/m (+0.2% m/m forecast; -0.4% m/m previous)

During his testimony before the House Financial Services Committee, Fed Chair Powell warned that below-trend growth is likely needed; likely more rate hikes ahead but likely at more moderate pace and based on data.

New Zealand’s trade surplus narrowed down from 148.2M NZD to 46M NZD in May as imports (+4.4% y/y) outpaced exports (+2.8% y/y)

SNB raised its interest rates by 25bps to 1.75%, its highest since April 2002. Chairman Jordan doesn’t rule out further rate hikes.

Price Action News

The prospect of higher interest rates in the U.S. spooked risk-takers in today’s Asian session trading.

Luckily, things turned around just before the start of the European session when hawkish Bank of England (BOE) expectations and improved risk sentiment boosted the China-related AUD.

The Australian dollar saw a V-shaped recovery and is now trading just under its daily open prices against its major counterparts.

Upcoming Potential Catalysts on the Forex Economic Calendar:

BOE’s monetary policy decision at 11:00 am GMT
U.S. initial jobless claims at 12:30 pm GMT
Fed Gov. Powell’s 2nd testimony day at 2:00 pm GMT
U.S. existing home sales at 2:00 pm GMT
EIA crude oil inventories at 3:00 pm GMT
Australia’s flash manufacturing and services PMIs at 11:00 pm GMT
Japan’s national core CPI at 11:30 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

GBP/CHF: 15-min

Breakout alert! In case you missed it, the Swiss National Bank (SNB) raised its interest rates by 25 basis points to 1.75%.

SNB Chairman Jordan also hinted that they’re open to even more interest rate hikes.

GBP/CHF, which was already trading below a trend line support, made even new intraweek lows.

And now it’s the Bank of England’s (BOE) turn under the spotlight. Many believe that Governor Bailey and his team would need to raise their rates a bit higher than initially planned given how sticky the U.K.’s high inflation is.

Depending on how hawkish BOE members are, traders could worry about higher rates choking U.K.’s growth and dragging it into a recession.

GBP/CHF could find resistance from today’s Pivot Point (1.1430) level that happens to line up with the 15-minute chart’s 200 SMA and 50% Fibonacci pullback.

A bounce from the 1.1420 – 1.1430 zone could mean another trip to GBP/CHF’s weekly lows closer to 1.1360.

But if traders focus on higher interest rates and the BOE does a good job of easing recession fears, then GBP/CHF could go back to its June uptrend.

That is, GBP/CHF could trade back above its trend line support and head for previous inflection points like 1.1470 or 1.1480.