• FxWirePro: GBP/CHF pivotal around major trendline support at 1.3050, focus on UK retail sales for further impetus

    Source: FxWire Pro - Technicals / 19 Jul 2018 03:33:17   America/New_York

    • GBP/CHF is extending range trade on the day, hovers around major trendline support at 1.3050.
       
    • GBP tumbled across the board after UK’s inflation figures failed to meet expectations.
       
    • After poor inflation data markets wary as upcoming Retail Sales are expected to show contraction.
       
    • June Retail Sales m/m is forecast to clock in at just 0.4%, compared to the previous month's 1.3%. The y/y Retail Sales for June are expected to remain flat at 3.9%.
       
    • Monthly Core Retail Sales (excluding fuels) for June is also expected to decline, with traders calling for a slide from 1.3% to 0.3%.
       
    • Technical indicators on daily charts have turned bearish. Stochs and RSI are sharply lower. 
       
    • Any positive surprise in the data could see momentary spike in GBP which could provide good entry opportunities.
       
    • The pair finds stiff resistance at 1.3133 (nearly converged 5-DMA and 21-EMA). Break above could see test of 200-DMA. Bearish invalidation only on break above.
       
    • On the flipside, decisive break below major trendline support at 1.3050 will see drag lower.

    Support levels - 1.3050 (trendline support), 1.30, 1.2976 (88.6% Fib)

    Resistance levels - 1.31, 1.3133 (5-DMA), 1.3139 (21-EMA)

    Call update: Our previous call (https://www.econotimes.com/FxWirePro-GBP-CHF-rejected-at-strong-trendline-resistance-at-13265-break-below-21-EMA-13162-to-see-further-weakness-1404410) has hit TP1/2.

    Recommendation: Book partial profits at lows. Watchout for break below 1.3050 for further weakness.

    FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -141.89 (Bearish), while Hourly CHF Spot Index was at 62.33 (Neutral) at 0715 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
     

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