The British Pound turned out to be the strongest major currency last week, after the dovish FOMC statement hit the wires on Wednesday. The Swiss Franc also put on a good show on account of a dovish FOMC and due to its safe haven appeal amid Greek issue.
The report titled “Trading the FOMC statement†published on June 17th, ahead of the FOMC statement, anticipated GBP and CHF as major beneficiaries in case of dovish FOMC statement. The GBP/USD pair rose to trade within a touching distance of the anticipated target 1.5930-1.5940 (high of 1.5928 on June 18th). Meanwhile, the USD/CHF fell to a low of 0.9149 on June 18th, before closing at 0.9213 (above the immediate support of weekly 50-MA at 0.9178).
_20150622144942.png "GBPUSD chart")
Ahead in the week, traders could keep an eye on the daily closing level in the GBP/USD pair. A break below 1.5795 ((confluence of 76.4% Fib E (1.4564-5490-1.5088 and 50% Fib E of (1.4564-1.5813-1.5169)) could mean a short-term stop is in place at 1.5928.
On the higher side, a break above 1.5876 (50% Fib R of 1.7190-1.4564) shall open doors for 1.5941 (61.8% Fib E of 1.4564-1.5813-1.5169). A break above 1.5950-1.5960 (inverted head and shoulder neckline) could push the pair to levels over and above 1.60.
_20150622145038.png "GBPCHF")
The pair did to a low of 1.4505 earlier today, before the safe haven bids on the CHF exhausted after the EU chief expressed a possibility of a Greek deal before the weekend. However, nothing significant has come through from the EU meeting today, except the optimistic talk. Thus, the doors remain open for a rebound in the Swiss Franc. In such a case, the GBP/CHF pair could resume its fall.
As per the daily chart, the GBP/CHF spot has failed to take out the 200-DMA for the third consecutive session. On the weekly chart, we already witnessed a bearish close below 1.4598. A daily close below the same is likely to open doors for a sell-off to the immediate support at 1.4434 (100-DMA) and 1.4475 (50-DMA). On the higher side, only a daily close above the 200-DMA located at 1.4630 could bring in fresh bids.
The report titled “Trading the FOMC statement†published on June 17th, ahead of the FOMC statement, anticipated GBP and CHF as major beneficiaries in case of dovish FOMC statement. The GBP/USD pair rose to trade within a touching distance of the anticipated target 1.5930-1.5940 (high of 1.5928 on June 18th). Meanwhile, the USD/CHF fell to a low of 0.9149 on June 18th, before closing at 0.9213 (above the immediate support of weekly 50-MA at 0.9178).
GBP and CHF declined today on hopes of Greek deal
The increased hopes of Greek deal pushed the GBP/USD pair to a low of 1.5804. The fall in the cable was largely due to the offered tone on the GBP seen in the EUR/GBP cross. On the other hand, the Swiss Franc too has come under pressure, taking the USD/CHF pair higher to 0.9924 levels. The strength in the USD seen today is mainly on account of hopes of Greek deal and not due to US factors.Ahead in the week, traders could keep an eye on the daily closing level in the GBP/USD pair. A break below 1.5795 ((confluence of 76.4% Fib E (1.4564-5490-1.5088 and 50% Fib E of (1.4564-1.5813-1.5169)) could mean a short-term stop is in place at 1.5928.
On the higher side, a break above 1.5876 (50% Fib R of 1.7190-1.4564) shall open doors for 1.5941 (61.8% Fib E of 1.4564-1.5813-1.5169). A break above 1.5950-1.5960 (inverted head and shoulder neckline) could push the pair to levels over and above 1.60.
GBP/CHF – failed at key Fib resistance
The report titled “GBP/CHF: Bearish below 1.4598, watch out for weekly close†published on June 18th, discussed a possibility of another weekly failure to take out the resistance at 1.4598 ((which is the 23.6% Fib retracement of the rise from 1.2686 (post SNB low in Jan) to 1.5189 (March. 8 high)). The pair did fail to close above 1.4598 on the weekly chart as anticipated, thereby increasing the possibility of a sell-off to the anticipated target of 1.4350.The pair did to a low of 1.4505 earlier today, before the safe haven bids on the CHF exhausted after the EU chief expressed a possibility of a Greek deal before the weekend. However, nothing significant has come through from the EU meeting today, except the optimistic talk. Thus, the doors remain open for a rebound in the Swiss Franc. In such a case, the GBP/CHF pair could resume its fall.
As per the daily chart, the GBP/CHF spot has failed to take out the 200-DMA for the third consecutive session. On the weekly chart, we already witnessed a bearish close below 1.4598. A daily close below the same is likely to open doors for a sell-off to the immediate support at 1.4434 (100-DMA) and 1.4475 (50-DMA). On the higher side, only a daily close above the 200-DMA located at 1.4630 could bring in fresh bids.
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