GBP Falls on Soft UK Data
GBPCHF is on watch today with the retail market holding a more than 80% long position in the pair. We’ve been trending lower since the early April highs and the current backdrop looks favourable for further shorts near-term. GBP is on the ropes following the latest UK data which showed retail sales falling into negative territory last month. Given the current growth fears in the UK, the data has caused a sharp unwinding of GBP longs. On the back of hotter-than-forecast UK inflation earlier in the week, the near-term outlook for GBP has grown more dim. Additionally, the fall back in risk appetite into the end of the week has seen CHF rallying on increased safe-haven inflow.
CHF Rallying on Safe Haven Demand
With attention shifting to the forthcoming FOMC meeting and expectations of further Fed tightening, the current dynamic looks likely to continue. US earnings have also grown more mixed in recent days with earnings undershoots from big names such as Tesla and Goldman Sachs adding to the risk off tone. While stocks continue to retreat, expect CHF to remain well supported keeping GBPCHF risks skewed to the downside for now.
Technical Views
GBPCHF
The decline in GBPCHF has been framed by a well-defined bear channel. Price is currently testing a key support level along the 1.1076 area. With momentum studies bearish, the focus is on a break of this area and continuation of the channel down towards next support at the 1.0991 area. To the topside, bulls need to break above 1.1168 to affect a shift in momentum.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.