GBP/CHF is trading in the green at 1.2806 level and it seems poised to take out the immediate resistance levels. The pair has moved sideways in the short term, so it could develop a strong movement soon.
The Pound has rallied today after the UK Public Sector Net Borrowing and the CBI Industrial Production indicators were released.
UK public sector net borrowing lower than expected
The borrowing figures were better than had been expected. Net public sector borrowing in May was £24.3 billion, still the second-highest on record but better than the forecast of £28.5 billion.
In comments provided to the Financial Times, Michal Stelmach, senior economist at KPMG UK, explained the figures with reference to an undershoot in the expenses for furloughing workers. “The furlough scheme, which the OBR expected to cost nearly £50 billion less this financial year, is likely to undershoot that forecast thanks to stronger demand for staff and some companies returning unused cash to the Exchequer.”
Tomorrow, the UK Flash Manufacturing PMI and the Flash Services PMI could help the Pound to drag the pair higher if the figures come in better than expected.
Furthermore, the BoE could bring more action on Wednesday when it will publish its Official Bank Rate and the Asset Purchase Facility.
Forex trading GBP/CHF technical analysis
GBP/CHF is pressuring the weekly R1 (1.2802) level and the upper median line (UML) of the descending pitchfork. A valid breakout through the confluence area formed at the intersection between these levels could bring a larger growth.
Technically, a new higher high, a bullish closure above 1.2817 level could really announce more gains. On the other hand, a false breakout with great separation or a major bearish engulfing could bring a new downside momentum in the short term.
GBP/CHF is somehow expected to breakout from the descending pitchfork’s body after its failure to come back down towards the median line (ML).
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