A surprise SNB decision got traders selling CHF today!
How has it affected GBP/CHF’s price action and will it lead to a trade opportunity?
Before moving on, ICYMI, yesterday’s watchlist checked out GBP/USD’s potential pullback ahead of the Fed and BOE’s policy decisions. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
As expected, the Fed kept its Fed funds target range at 5.25% – 5.50%
The Fed’s dot plot forecasts pointed to at least one more rate hike in 2023 and “only” a 50bps rate cut in 2024 (from a 100bps rate cut estimated in June)
New Zealand’s GDP grew by 0.9% in Q2, more than twice the 0.4% uptick expected and better than the -0.1% reading in Q1
Japan Chief Cabinet Secretary Matsuno: The government is monitoring currency developments “with a high sense of urgency,” and warned that it’s not “ruling out any options”
Price Action News
We don’t always feature CHF as a market mover but when we do, it’s because Switzerland’s central bank surprised the markets!
A few hours earlier, the Swiss National Bank (SNB) kept its interest rates steady at 1.75% when everyone and his momma expected a rate hike out of the quarterly meeting.
CHF dropped across the board at the news and has so far seen minimal pullback before it made new intraday lows. Yipes!
BOE’s monetary policy decision at 11:00 am GMT
U.S. initial jobless claims at 12:30 pm GMT
U.S. Philly Fed manufacturing index at 12:30 pm GMT
ECB President Lagarde to give a speech at 2:00 pm GMT
Eurozone consumer confidence at 2:00 pm GMT
U.S. existing home sales at 2:00 pm GMT
U.S. CB leading index at 2:00 pm GMT
New Zealand Westpac consumer sentiment at 9:00 pm GMT
New Zealand’s trade balance at 10:45 pm GMT
Australia’s manufacturing and services PMIs at 11:00 pm GMT
U.K. GfK consumer confidence at 11:01 pm GMT
Japan’s manufacturing PMI at 12:30 am GMT (Sept 22)
BOJ’s policy decision out during the Asian session
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
As mentioned above, the SNB’s surprising decision to keep its interest rates steady dragged the Swiss franc lower across the board.
In GBP/CHF’s case, this meant a trip to the 1.1160 area after a bounce from the 1.1070 levels. That’ almost 100 pips in a bit over an hour!
Can GBP/CHF maintain its gains?
The pair is currently testing the R2 (1.1160) Pivot Point level in the 15-minute time frame, which coincidentally lines up with an area of interest from last week.
Watch the newswires closely in case CHF’s weakness doesn’t get momentum in the next trading sessions.
The BOE‘s decision is up in a few hours. While many expect the central bank to raise its interest rates by 25 basis points, some are concerned that it won’t do the economy’s growth trajectory any favors.
Look out for GBP/CHF weakness or a clear bounce from its R2 levels. A downswing could lead to a retest of the 1.1120 area of interest if not a possible trip down to the pair’s weekly lows.
Good luck and good trading this one!
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