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GBP/CHF: from 8-month lows to 1-week highs in hours

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Córdoba) - The pound reversed sharply across the board and ended various days of sharp declines with a dramatic bullish correction. GBP/CHF rose from the lowest level since May to the highest in a week.

    The pair dropped yesterday to test weekly lows at 1.4140/50 and rebounded, then it gained momentum after the European Central Bank decision and Draghi’s press conference. Today the rally continued and rose further.

    Recently peaked at 1.4566, the highest since last Thursday and it was holding near the highs, more than 400 pips above weekly lows.

    Weak CHF also boosting GBP/CHF

    While a stronger pound pushed the pair to the upside, it was exacerbated by a weak Swiss franc. While GBP/USD extended the recovery form mutli-year lows and climbed above 1.4300, USD/CHF was rising of the third day in a row trading above 1.0100, at the highest level since early December.

    GBP/CHF levels to watch

    To the upside, potential resistance levels could be located at 1.4600 (psychological / Dec 22 & 30 low) and 1.4640/50 (Dec 29 low / Jan 08 high). On the opposite direction, support might now lie at 1.4460 (23.6% Fibonacci retracement of recent rally) and 1.4380 (Jan 12 low / Jan 21 high).
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