Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
GBP/CHF: testing the resistance
Information is not investment advice
On the weekly chart of GBPCHF, we see two spikes in the course of a larger falling trend of the price. These took place in April 2018 and March-May 2019. Both times the price either traded at the level of the 200-period Moving Average but eventually did not fix the breakthrough, or actually broke it, but then went into decline the next week. We are observing a similar picture now – the price is testing the 200-period MA once again.
The daily chart shows in more detail the collision course of the rising trend in place since August (lower trend line) and the larger falling trend since April 2018 (upper trend line). If the price behaves the same way it did before, it will come closer to the upper line and bounce back down. For this scenario, the first big support on the way would be 1.2740 – the currency pair has been consolidating and moving sideways along this level during the entire month from the middle of October until the middle of November. On the other hand, if the market intends to set an entirely new large trend, then the price should be able to break the upper trend line and aim at 1.3400 as the first bullish threshold.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.
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