- Summary:
- GBPCHF forms a bullish pattern that should propel the cross to the 1.20 level. The SNB reiterated its willingness and ability to intervene.
The GBPCHF cross was one of the weakest ones recently. The CHF’s appreciation came in the context of extreme weakness from the British pound. Once again, uncertainty from the Brexit negotiations process weighed on the pound.
The 1.20 seems crucial for the GBPCHF cross. So far, in 2020 the pair was rejected on every attempt to move above. Even if it reached 1.22, as it did in the last attempt, it was quickly knocked down over five hundred points.
But the CHF’s appreciation comes in the context of a bullish pattern. The only thing that this triangle needs is time. Moreover, the recent consolidation looks like a continuation pattern that points – you guessed – to the 1.20 level again.
Swiss National Bank Leaves Monetary Policy Unchanged
The Swiss National Bank (SNB) just delivered today its quarterly monetary policy report. Unlike other central banks, the SNB does not release a statement each month or every six weeks. Instead, it does so every three months. For this reason, it represents a market-moving event, at least for the Swiss Franc.
Besides noting the effect of the COVID-19 on the Swiss economy, the SNB pointed out that it stands ready to intervene in the currency market. Naturally, to weaken the strength of the Swiss Franc. Nothing new here, only that the SNB comes to reinforce its willingness and ability to step in, should the CHF appreciate more than expected.
GBPCHF Technical Analysis
As mentioned earlier, the GBPCHF pair formed a contracting triangle for most of the year so far. It looks like the market is in the last segment of it, and the focus now shifts to the b-d trendline.
A break above the b-d trendline opens the gates for the measured move, but traders should take it step by step. More precisely, bulls would like to see the recent bullish flag break higher before going long. As such, they would likely buy a move above 1.1830 targeting 1.20 and having a stop loss at 1.1670.
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GBPCHF Price Forecast
