With the hawkish BoE Quarterly Inflation Report, the GBP rallied considerably on Thursday and maintained the same gains during early Friday while the Euro remained sidelined even after failed talks between Greece and European leaders. The CHF continued observing its slow and steady decline by liquidating considerable strength gained after SNB’s surprise move. Market players are now expecting a compromised solution to the Greece bailout details on its postponed meeting of Monday.
Meanwhile, the following is a brief technical overview of USDCHF, EURGBP and GBPCHF.
USDCHF continued observing its 0.9170 – 0.9335 trading region while broader ascending trend channel continue signaling the pair’s up-move. From the current level, the 0.9520 horizontal line resistance becomes an immediate test for the pair on the break of 0.9335. Further, a break of 0.9520 is followed by the ascending trend-channel resistance line, near 0.9620, which is likely to limit near-term up-move of the pair. Should the pair closes above 0.9620, the pair might rally towards 0.9800 level in a quick up-move. Alternatively, a break of 0.9170, can cause the pair to test support line of the channel, near 0.9040, a break of which becomes important for the pair to plunge towards 0.8800 support. Moreover, a sustained break of 0.8800 can cause the pair to test 0.8650.
Even after the pair failed to sustain the break of 0.7400 and reversed from 0.7374, the descending triangle pattern on H4, a bearish chart formation, continue supporting the weaker days for the EURGBP. From the current level, the 0.7460 and the 0.7485 are likely immediate resistance for the pair. Should manages to break the resistance line of the triangle, near 0.7485, it can quickly rally towards 0.7590, which becomes an important resistance for the pair, breaking which it can surpass 0.7700 levels. On the downside, support line of the triangle, near 0.7360, is likely support for the pair, breaking which it can plunge towards 0.7250-40 horizontal support zone before testing the 0.7100 mark.
With the broader ascending trend channel continue supporting the GBPCHF advance, recent formations have painted an ascending trend-line, near 1.4160, which marks the immediate support for the pair. On the break of such support level, the pair is likely to test the support line of the channel, near 1.3725. Should the pair extend its decline below 1.3725, it is vulnerable to decline towards sub-1.3200 support levels. On the upside, the horizontal resistance-line, near 1.4350 and the upper line of the channel, near 1.4530, are expected to restrict immediate up-move of the pair. On the sustained break of 1.4530, the pair can test 1.4650 resistance level before surpassing the 1.4800 mark.
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