HomeLive CommentsGBP/CHF staying bearish as SNB and BoE loom

GBP/CHF staying bearish as SNB and BoE loom

SNB and BoE rate decisions are the next focuses for today. SNB is expected to policy unchanged today but start turning up a hawkish tone, setting the stage for the first rate hike in 15 years at the September meeting. Inflation reaching 2.9%, a 14-year high, in May isn’t much of a problem comparing to other parts of the world. Yet, ECB’s tightening stance is giving SNB much room to adjust policy now.

The situation for BoE is more complicated. A 25bps hike to 1.25% is the base case. There are arguments for a larger hike with inflation at 7.8% yoy. Yet, there are also arguments for a pause given that UK economy has already started a recession in Q2. The eventual decision and the voting could drive much volatility in the Pound.

Here are some previews for BoE and SNB:

GBP/CHF is staying in the down trend from 1.3070 for now and outlook remains bearish as long as 1.2292 resistance holds. But the structure of the decline suggests that it’s more of a corrective move. Downside potential could be limited with strong support at around 61.8% retracement of 1.1107 to 1.3070 at 1.1857 to complete the down trend.

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