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GBP-CHF

GBPCHF facing bullish pressure, potential for more upside!Price is above 1st support at 1.27205 in line with 38.2% Fibonacci retracement and 23.6% Fibonacci extension. It could potentially bullish from 1st support at 1.2705 in line with 38.2% Fibonacci retracement and 23.6% Fibonacci extension to 1st resistance at 1.28183 in line with Horizontal swing high and 61.8% Fibonacci extension. Our bullish bias is further supported by how Price is holding above the EMA and MACD is shown to be above the 0 line. Otherwise price may continue to bearish to 2nd support at 1.26676 in line with 50% Fibonacci retracement and 38.2% Fibonacci extension. Trading CFDs on margin carries high risk. Losses can exceed the initial investment so please ensure you fully understand the risk.
Long
by TradeGATEHub
1
GBPCHF bullish pressure | 19th Oct 2021 We can expect price to bounce up from the pivot level in line with the 23.6% Fibonacci retracement towards the take profit level in line with 61.8% Fibonacci projection. Our bullish bias is further supported by the RSI abiding to the ascending trendline. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Long
by Rockqet
GBPCHF potential bullish breakout! | 15th OctPrice has been consolidating in a triangle. We see the potential of a bullish breakout from our target entry/pivot at 1.26207 in line with 38.2% Fibonacci retracement and graphical overlap towards our target take profit at 1.26586 in line with 100% Fibonacci extension. Technical indicators are showing bullish momentum. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Long
by Rockqet
GBP CHF - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: BULLISH 1. The Monetary Policy outlook for the BOE The Sep policy meeting from the BoE saw money markets rushing to price in a much faster and more aggressive policy path than previously expected. Even though this of course falls in line with our bullish bias for the Pound, we do think the market is a bit too aggressive too quick right now. The bank did explain that they now see inflation above 4% by Q4 of this year, and the possibility of more sticky inflation was the key reasons why we saw a 7-2 QE vote split with Saunders and Ramsden both dissenting to cut purchases. However, it’s important to note that the remaining 7 members still see inflation as transitory, and the fact that they expect CPI above 4% means any prints that don’t come close to that poses downside risks. Furthermore, even though the bank said their expectations of modest tightening has strengthened, the admitted that lots of uncertainties remain. A big one of these is the labour market, where even though the number of furloughed staff have decreased, that decrease has materially slowed from August which poses more uncertainty for the labour market. Thus, even though our bias remains unchanged, and we see the bank lifting rates in Q1, we do think the over optimistic moves in money markets poses short-term headwinds. 2. The country’s economic developments The successful vaccination program that allowed the UK to open up faster and sooner than peers provided a favourable environment for Sterling and the strength of the economic recovery has meant solid growth differentials favouring GBP. However, a lot of these positives are arguably priced, and the recent slowdown in activity data that suggests peak growth has been reached could mean an uphill push for GBP to see the same size of outperformance we saw earlier. With our above comments about money markets, it also means that there is now more risk to downside surprises than was the case a few months ago. Even though the current fuel challenges should not be enough to derail the economic recovery, the NatGas shortage is much more serious and if not resolved quickly could add to some additional price pressures which in the past few sessions have seen even more aggressive pricing from money markets for additional tightening. 3. Political Developments Even though a Brexit deal was reached at the end of last year, some issues like the Northern Ireland protocol remains, and with neither side willing to budge right now it seems like a never ending can kicking could see these issues drag on for a long time. For now, Sterling has looked through all the rigmarole and should continue to do so as long as the cans are kicked down the road. 4. CFTC Analysis Latest CFTC data showed a positioning change of -21982 with a net non-commercial position of -20018. Sterling have seen a very impressive rebound following last week’s sell off. Right now, large speculators and leveraged funds are at odds with each other, with large speculators holding a net-short and leveraged funds still sitting on the largest net-long among the majors. Markets reacted positively to new Chief Economist Pill’s comments about inflation , which yet again sparked additional downside in SONIA futures , with money markets pricing in a 10-basis point hike in the next two months and more than 70 basis points of tightening in 2022. So, even though this amount of tightening should be positive for a currency, the reasons why the markets are pricing in the steeper rate path is out of fear of inflation and not due to a more positive economic outlook, which as we highlighted above does pose headwinds for the Pound in the weeks ahead. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF with Swiss economic data or SNB policy meetings rarely being very market moving. Although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall dovish disposition and preference for being behind the ECB in terms of policy decisions. The market's overall risk tone improved considerably after the pandemic as a result of the global vaccine roll out and the unprecedented amount of monetary policy accommodation and fiscal support from governments. The Delta variant and subsequent impact on growth expectations is of course a sobering reminder that risks remain. Thus, there is still a degree of uncertainty and risks to the overall risk outlook remains which could prove supportive for the safe havens like the CHF should negative factors for the global economy develop. However, on balance the overall risk outlook is still positive in the med-term and barring any major meltdowns in risk assets the bias for the CHF remains bearish in the med-term . 2. Idiosyncratic drivers for the CHF Despite the negative drivers, the CHF saw some surprisingly strength from June. This divergence from the fundamental outlook didn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests. Recent research from the team has revealed an interesting correlation between the CHF and simultaneous price action in both Gold and the USD which could explain some of the recent price action. We also need to be careful of the possibility of SNB FX intervention. Apart from that, ING investment bank has recently argued that recent CHF strength could be due to the lower inflation in Switzerland compared to the EU which meant that the real trade-weighted CHF has been trading too cheap. They also expanded that the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful FX intervention lately. The bottom line is that there are often plenty of idiosyncratic drivers which might or might not impact the CHF and makes short-term price fluctuations a mixed bag for the most part. 3. CFTC Analysis Latest CFTC data showed a positioning change of -4092 with a net non-commercial position of -15679. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF is back inside net-short territory as one would expect from a currency with an overall med-term bearish outlook. Even though we expect the currency to continue weakening in the med-term , any drastic escalation in risk off tones could continue to provide support for the safe-haven currency in the short-term and is always something to keep in mind.
by thunderpips
2
GBP CHF - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: BULLISH 1. The Monetary Policy outlook for the BOE The Sep policy meeting from the BoE saw money markets rushing to price in a much faster and more aggressive policy path than previously expected. Even though this of course falls in line with our bullish bias for the Pound, we do think the market is a bit too aggressive too quick right now. The bank did explain that they now see inflation above 4% by Q4 of this year, and the possibility of more sticky inflation was the key reasons why we saw a 7-2 QE vote split with Saunders and Ramsden both dissenting to cut purchases. However, it’s important to note that the remaining 7 members still see inflation as transitory, and the fact that they expect CPI above 4% means any prints that don’t come close to that poses downside risks. Furthermore, even though the bank said their expectations of modest tightening has strengthened, the admitted that lots of uncertainties remain. A big one of these is the labour market, where even though the number of furloughed staff have decreased, that decrease has materially slowed from August which poses more uncertainty for the labour market. Thus, even though our bias remains unchanged, and we see the bank lifting rates in Q1, we do think the over optimistic moves in money markets poses short-term headwinds. 2. The country’s economic developments The successful vaccination program that allowed the UK to open up faster and sooner than peers provided a favourable environment for Sterling and the strength of the economic recovery has meant solid growth differentials favouring GBP. However, a lot of these positives are arguably priced, and the recent slowdown in activity data that suggests peak growth has been reached could mean an uphill push for GBP to see the same size of outperformance we saw earlier. With our above comments about money markets, it also means that there is now more risk to downside surprises than was the case a few months ago. Even though the current fuel challenges should not be enough to derail the economic recovery, the NatGas shortage is much more serious and if not resolved quickly could add to some additional price pressures which in the past few sessions have seen even more aggressive pricing from money markets for additional tightening. 3. Political Developments Even though a Brexit deal was reached at the end of last year, some issues like the Northern Ireland protocol remains, and with neither side willing to budge right now it seems like a never ending can kicking could see these issues drag on for a long time. For now, Sterling has looked through all the rigmarole and should continue to do so as long as the cans are kicked down the road. 4. CFTC Analysis Latest CFTC data showed a positioning change of +2182 with a net non-commercial position of +1964. The downside in the Pound this week was something else, slicing through key technical levels on majority of the GBP crosses. Even though the over-aggressive money markets and subsequent moves in SONIA futures we think can explain some of the angst, there is also a far less complicated reason for the downside. Even though large speculators were neutral on Sterling, leveraged funds had a very sizable net-long built up in Sterling in a very short space of time, which meant when key technical levels were breached it was a very fast run to the exists and fast money scrambled to get out of dodge. With the reprieve in Sterling only starting Thursday and CFTC cut off on Tuesday, we would expect to see a sizeable unwind of those leveraged funds longs. Furthermore, after the run lower, we are actively looking to add back to GBP on the long side. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF with Swiss economic data or SNB policy meetings rarely being very market moving. Although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall dovish disposition and preference for being behind the ECB in terms of policy decisions. The market's overall risk tone improved considerably after the pandemic as a result of the global vaccine roll out and the unprecedented amount of monetary policy accommodation and fiscal support from governments. The Delta variant and subsequent impact on growth expectations is of course a sobering reminder that risks remain. Thus, there is still a degree of uncertainty and risks to the overall risk outlook remains which could prove supportive for the safe havens like the CHF should negative factors for the global economy develop. However, on balance the overall risk outlook is still positive in the med-term and barring any major meltdowns in risk assets the bias for the CHF remains bearish in the med-term . 2. Idiosyncratic drivers for the CHF Despite the negative drivers, the CHF saw some surprisingly strength from June. This divergence from the fundamental outlook didn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests. Recent research from the team has revealed an interesting correlation between the CHF and simultaneous price action in both Gold and the USD which could explain some of the recent price action. We also need to be careful of the possibility of SNB FX intervention. Apart from that, ING investment bank has recently argued that recent CHF strength could be due to the lower inflation in Switzerland compared to the EU which meant that the real trade-weighted CHF has been trading too cheap. They also expanded that the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful FX intervention lately. The bottom line is that there are often plenty of idiosyncratic drivers which might or might not impact the CHF and makes short-term price fluctuations a mixed bag for the most part. 3. CFTC Analysis Latest CFTC data showed a positioning change of -2370 with a net non-commercial position of -11587. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF is back inside net-short territory as one would expect from a currency with an overall med-term bearish outlook. Even though we expect the currency to continue weakening in the med-term , any drastic escalation in risk off tones could continue to provide support for the safe-haven currency in the short-term.
by thunderpips
1
Wait for Key level breakout and sell signal with GBPCHFH2 time frame. Structure: The uptrend was broken when the down move broke the Key level at 1.26600. There is now a smaller uptrend forming within the range of the previous down move and a new key level appears at 1.26200. Wait for the price to break this Key level and have a retest move, then look for selling opportunities with price targets of 1.25600 and 1.24800. ----------------------------------------------------------------------------------------------- Wish you all have a good trading day!
Short
by tradafx
GBP CHF - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: BULLISH 1. The Monetary Policy outlook for the BOE The Sep policy meeting from the BoE saw money markets rushing to price in a much faster and more aggressive policy path than previously expected. Even though this of course falls in line with our bullish bias for the Pound, we do think the market is a bit too aggressive too quick right now. The bank did explain that they now see inflation above 4% by Q4 of this year, and the possibility of more sticky inflation was the key reasons why we saw a 7-2 QE vote split with Saunders and Ramsden both dissenting to cut purchases. However, it’s important to note that the remaining 7 members still see inflation as transitory, and the fact that they expect CPI above 4% means any prints that don’t come close to that poses downside risks. Furthermore, even though the bank said their expectations of modest tightening has strengthened, the admitted that lots of uncertainties remain. A big one of these is the labour market, where even though the number of furloughed staff have decreased, that decrease has materially slowed from August which poses more uncertainty for the labour market. Thus, even though our bias remains unchanged, and we see the bank lifting rates in Q1, we do think the over optimistic moves in money markets poses short-term headwinds. 2. The country’s economic developments The successful vaccination program that allowed the UK to open up faster and sooner than peers & provided a favourable environment for Sterling and the strength of the economic recovery and GDP upgrades from the BOE and IMF meant growth differentials favoured GBP. However, a lot of these positives are arguably priced, and the recent slowdown in activity data that suggests peak growth has been reached could mean an uphill push for GBP to see the same size of outperformance we saw earlier. With our above comments about money markets, it also means that there is now more risk to downside surprises than was the case a few months ago. 3. Political Developments Even though a Brexit deal was reached at the end of last year, some issues like the Northern Ireland protocol remains, and with neither side willing to budge right now it seems like a never ending can kicking could see these issues drag on for a long time. For now, Sterling has looked through all the rigmarole and should continue to do so as long as the cans are kicked down the road. 4. CFTC Analysis Latest CFTC data showed a positioning change of -5008 with a net non-commercial position of -218. The Pound pushed higher after last week’s FOMC failed to send jitters across risk assets and after the market got very optimistic about higher interest rates in the UK next year. However, as we noted above, we are cautious of recent money market pricing. Another factor to consider in the week ahead is the flurry of reports over the weekend of the current energy hick ups facing the UK, with some media outlets reporting massive fuel shortages which has sparked a frenzy of panic buying and possibly creating a much bigger issue than there was originally. Even though the government has assured that there is enough fuel and currently no crisis, we do want to keep the risks of some possible negative sentiment for GBP in line with this in mind. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF with Swiss economic data or SNB policy meetings rarely being very market moving. Although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall dovish disposition and preference for being behind the ECB in terms of policy decisions. The market's overall risk tone improved considerably after the pandemic as a result of the global vaccine roll out and the unprecedented amount of monetary policy accommodation and fiscal support from governments. The Delta variant and subsequent impact on growth expectations is of course a sobering reminder that risks remain. Thus, there is still a degree of uncertainty and risks to the overall risk outlook remains which could prove supportive for the safe havens like the CHF should negative factors for the global economy develop. However, on balance the overall risk outlook is still positive in the med-term and barring any major meltdowns in risk assets the bias for the CHF remains bearish in the med-term . 2. Idiosyncratic drivers for the CHF Despite the negative drivers, the CHF saw some surprisingly strength from June. This divergence from the fundamental outlook didn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests. Recent research from the team has revealed an interesting correlation between the CHF and simultaneous price action in both Gold and the USD which could explain some of the recent price action. We also need to be careful of the possibility of SNB FX intervention. Apart from that, ING investment bank has recently argued that recent CHF strength could be due to the lower inflation in Switzerland compared to the EU which meant that the real trade-weighted CHF has been trading too cheap. They also expanded that the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful FX intervention lately. The bottom line is that there are often plenty of idiosyncratic drivers which might or might not impact the CHF and makes short-term price fluctuations a mixed bag for the most part. 3. CFTC Analysis Latest CFTC data showed a positioning change of -3339 with a net non-commercial position of -9217. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF is back inside net-short territory as one would expect from a currency with an overall med-term bearish outlook. Even though we expect the currency to continue weakening in the med-term , any drastic escalation in risk off tones could continue to provide support for the safe-haven currency in the short-term.
Editors' picks
by thunderpips
24
GBP/CHF:FUNDAMENTAL ANALYSIS+PATTERN FORMATION LONG SETUP 🔔The Swiss National Bank Sight Deposit Interest Rate is predicted at -0.75%. Forex traders can compare this to the previous Swiss National Bank Sight Deposit Interest Rate, reported at -0.75%. Traders should monitor the press release following the announcement for clues about potential changes to monetary policy and the inflation outlook. The UK Markit/CIPS Manufacturing PMI for September is predicted at 59.0. Forex traders can compare this to the UK Markit/CIPS Manufacturing PMI for August, reported at 60.3. The UK Markit/CIPS Services PMI for September is predicted at 55.0, and the UK Markit/CIPS Composite PMI is predicted at 54.5. Forex traders can compare this to the UK Markit/CIPS Services PMI for August, reported at 55.0, and the UK Markit/CIPS Composite PMI, reported at 54.8. The Bank of England is predicted to keep interest rates at 0.10%, and the Asset Purchase Target at £875B. Forex traders can compare this to the previous Bank of England meeting where the UK central bank decided to keep interest rates at 0.10% and kept the Asset Purchase Target at £875B. Traders should monitor the press release following the announcement for clues about potential changes to monetary policy and the inflation outlook. The forecast for the GBP/CHF turned bullish after this currency pair halted its most recent correction. Adding to upside pressures is the Ichimoku Kinko Hyo Cloud. Can bulls pressure the GBP/CHF into its horizontal resistance area and recover the most recent sell-off?
Long
by FOREXN1
18
GBP CHF - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: BULLISH 1. Virus Situation The successful vaccination program has allowed the UK to open up faster and sooner than peers & provides a favourable environment for GBP. 2. The Monetary Policy outlook for the BOE The BoE meeting on 5 August provided a flurry of comments with something for both the doves and the hawks. The QE vote split was more dovish (7-1) with BoE’s Saunders the only dissenter, while upgrades to growth and inflation were positive, even though price pressures is still views as mostly ‘transitory’. Reasons for a patient stance was the uncertainty surrounding the virus at the time as well as waiting for the end of the furlough scheme to assess the impact on the labour market. Thus, the bank will be in wait-and-see mode until at least Oct or Nov. The other important change was the reduction in the bank’s QT threshold from 1.5% to 0.5%, with the bank looking at a bank rate of 0.5% to stop reinvesting maturing assets and a rate of 1.0% to start selling assets and reducing its balance sheet . Market participants are mixed about what this means (it’s positive since the bank has enough confidence to lower the balance sheet even while rates are low, but on the other hand it means rates can stay lower for longer which is a negative). However, all in all the most important take away was the continued optimism about the economy despite virus uncertainty and comments that modest tightening will be required. 3. The country’s economic developments Hopes of a fast economic recovery has seen the BOE and IMF upgrade GDP projections for the UK which has widened the growth differentials between other major economies and has been a positive input for GBP. However, a lot of these positives are arguably already reflected in the price which means a continuation of the recent misses in economic data could make further solid gains more difficult for the GBP to maintain. The incoming data has been mixed with CPI and the labour market pushing higher while consumer spending disappointed. This week’s incoming BoE has some room to disappoint in our view as the market might have gotten too optimistic about how the bank will respond after the recent CPI print. Remember, the bank’s own projections expected CPI to reach 4% before cooling off, which means just above 3% shouldn’t scare them into tightening, and furthermore the bank still needs to evaluate how the labour market keeps up after furlough ends. Even though we are still bullish on the currency and expect higher rates next year, the BoE might cool some of the optimism and pick a more patient stance this week. 4. Political Developments Even though a Brexit deal was reached at the end of last year, some issues like the Northern Ireland protocol remains, and with neither side willing to budge right now it seems like a never ending can kicking could see these issues drag on for a long time. For now, Sterling has looked through all the rigmarole and should continue to do so as long as the cans are kicked down the road. 4. CFTC Analysis Latest CFTC data (updated until 14 Sep) showed a positioning change of +29314 with a net non-commercial position of +4790. Latest CFTC data showed a sizable positioning change after recent hawkish BoE comments which have taken positioning from a net-short back into net-long territory. Even though our bias remains to the upside, the move in spot and rates markets shows some caution has been thrown into the wind and means we want to take a more sober and patient approach to Sterling going into this week’s BoE. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone has improving considerably from just a year ago because of the global vaccine roll out and the unprecedented amount of monetary policy accommodation and fiscal support from governments. The Delta variant and subsequent impact on growth expectations is of course a sobering reminder that risks remain. Thus, there is still a degree of uncertainty and risks to the overall risk outlook remains which could prove supportive for the safe havens like the CHF should negative factors for the global economy develop. However, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish in the med-term . 2. Idiosyncratic drivers for the CHF Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests. Recent research from the team has revealed an interesting correlation between the CHF simultaneous price moves in Gold and the USD which could explain some of the recent price action. We also need to be careful of the possibility of SNB FX intervention. Apart from that, ING investment bank has recently argued that recent CHF strength could be due to the lower inflation in Switzerland compared to the EU which meant that the real trade-weighted CHF has been trading too cheap. They also expanded that the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful FX intervention lately. The bottom line is that there are often plenty of idiosyncratic drivers which might or might not impact the CHF and makes short-term price fluctuations a mixed bag for the most part. 3. CFTC Analysis Latest CFTC data (updated until 14 Sep) showed a positioning change of -6098 with a net non-commercial position of -5878. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF has now moved back into net-short territory as one would expect from a currency with an overall med-term bearish outlook. Even though we expect the currency to continue weakening in the med-term , any drastic escalation in risk off tones could continue to provide support for the safe-haven currency in the short-term.
by thunderpips
2
GBP CHF - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: BULLISH 1. Virus Situation The successful vaccination program has allowed the UK to open up faster and sooner than peers & provides a favourable environment for GBP. 2. The Monetary Policy outlook for the BOE The BoE meeting on 5 August provided a flurry of comments with something for both the doves and the hawks. The QE vote split was more dovish (7-1) with BoE’s Saunders the only dissenter, while upgrades to growth and inflation were positive, even though price pressures is still views as mostly ‘transitory’. Reasons for a patient stance was the uncertainty surrounding the virus at the time as well as waiting for the end of the furlough scheme to assess the impact on the labour market. Thus, the bank will be in wait-and-see mode until at least Oct or Nov. The other important change was the reduction in the bank’s QT threshold from 1.5% to 0.5%, with the bank looking at a bank rate of 0.5% to stop reinvesting maturing assets and a rate of 1.0% to start selling assets and reducing its balance sheet . Market participants are mixed about what this means (it’s positive since the bank has enough confidence to lower the balance sheet even while rates are low, but on the other hand it means rates can stay lower for longer which is a negative). However, all in all the most important take away was the continued optimism about the economy despite virus uncertainty and comments that modest tightening will be required. 3. The country’s economic developments Hopes of a fast economic recovery has seen the BOE and IMF upgrade GDP projections for the UK which has widened the growth differentials between other major economies and has been a positive input for GBP. However, a lot of these positives are arguably already reflected in the price which means a continuation of the recent misses in economic data could make further solid gains more difficult for the GBP to maintain. The incoming data has been mixed with CPI and the labour market pushing higher while consumer spending disappointed. This week’s incoming BoE has some room to disappoint in our view as the market might have gotten too optimistic about how the bank will respond after the recent CPI print. Remember, the bank’s own projections expected CPI to reach 4% before cooling off, which means just above 3% shouldn’t scare them into tightening, and furthermore the bank still needs to evaluate how the labour market keeps up after furlough ends. Even though we are still bullish on the currency and expect higher rates next year, the BoE might cool some of the optimism and pick a more patient stance this week. 4. Political Developments Even though a Brexit deal was reached at the end of last year, some issues like the Northern Ireland protocol remains, and with neither side willing to budge right now it seems like a never ending can kicking could see these issues drag on for a long time. For now, Sterling has looked through all the rigmarole and should continue to do so as long as the cans are kicked down the road. 4. CFTC Analysis Latest CFTC data (updated until 14 Sep) showed a positioning change of +29314 with a net non-commercial position of +4790. Latest CFTC data showed a sizable positioning change after recent hawkish BoE comments which have taken positioning from a net-short back into net-long territory. Even though our bias remains to the upside, the move in spot and rates markets shows some caution has been thrown into the wind and means we want to take a more sober and patient approach to Sterling going into this week’s BoE. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone has improving considerably from just a year ago because of the global vaccine roll out and the unprecedented amount of monetary policy accommodation and fiscal support from governments. The Delta variant and subsequent impact on growth expectations is of course a sobering reminder that risks remain. Thus, there is still a degree of uncertainty and risks to the overall risk outlook remains which could prove supportive for the safe havens like the CHF should negative factors for the global economy develop. However, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish in the med-term . 2. Idiosyncratic drivers for the CHF Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests. Recent research from the team has revealed an interesting correlation between the CHF simultaneous price moves in Gold and the USD which could explain some of the recent price action. We also need to be careful of the possibility of SNB FX intervention. Apart from that, ING investment bank has recently argued that recent CHF strength could be due to the lower inflation in Switzerland compared to the EU which meant that the real trade-weighted CHF has been trading too cheap. They also expanded that the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful FX intervention lately. The bottom line is that there are often plenty of idiosyncratic drivers which might or might not impact the CHF and makes short-term price fluctuations a mixed bag for the most part. 3. CFTC Analysis Latest CFTC data (updated until 14 Sep) showed a positioning change of -6098 with a net non-commercial position of -5878. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF has now moved back into net-short territory as one would expect from a currency with an overall med-term bearish outlook. Even though we expect the currency to continue weakening in the med-term , any drastic escalation in risk off tones could continue to provide support for the safe-haven currency in the short-term.
by thunderpips
3
GBPCHF: Potential Structure Trade 🇬🇧🇨🇭 Hey traders, GBPCHF is trading in a bearish trend since April. Setting a new structure low in August, the price retraced. For the last two weeks, we see a sharp bullish rally. Yesterday the price reached 1.28 key daily structure resistance. A trend-following move may initiate from that. To catch it, on focus is a rising channel on 12H chart. Wait for its bearish breakout (candle close below its support) & then sell aggressively or on a retest with your safe stop lying above the highs of the channel. Next support will be 1.261 In case of a bullish breakout of the underlined red structure, further bullish continuation will be expected. ❤️Please, support this idea with a like and comment!❤️
Short
by VasilyTrader
7
GBPCHF Technical Analysis ⏳ Forex 💎 GBPCHF has got rejected several times from a significant resistance. It has also formed an Ascending Triangle which is expected to break below the Support and goes lower. 🏁 Short & Medium Term 💵 Invest Only 2% of your Portfolio 🎳 Entry at market or 1.27600 ☕️ TP1 1.26020 🍺 TP2 1.24500 🍻 TP3 ________ 🍾 TP4 ________ 🍷 TP5 ________ 🍸 TP6 ________ 🍹 TP7 ________ 🎁 TP8 ________ 🚫 SL 1.28200 Good Luck 🎲 Check the Links in Description and If you LIKE this analysis, Please support our page and Ideas by hitting the LIKE 👍 button. ❤️ Your Support is really appreciated! ❤️ Traders, if you have your own opinion about it, please write your own in the comment box. We will be glad for this. Feel free to request any pair/instrument analysis or ask any questions in the comment section below. We will have more FREE forecasts in TradingView soon Have a Profitable Day
Short
by Fibonacci-Signals
2
GBP CHF - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: BULLISH 1. Virus Situation The successful vaccination program has allowed the UK to open up faster and sooner than peers & provides a favourable environment for GBP. 2. The Monetary Policy outlook for the BOE The BoE meeting on 5 August provided a flurry of comments with something for both the doves and the hawks. The QE vote split was more dovish (7-1) with BoE’s Saunders the only dissenter, while upgrades to growth and inflation were positive, even though price pressures is still views as mostly ‘transitory’. Reasons for a patient stance was the uncertainty surrounding the virus at the time as well as waiting for the end of the furlough scheme to assess the impact on the labour market. Thus, the bank will be in wait-and-see mode until at least Oct or Nov. The other important change was the reduction in the bank’s QT threshold from 1.5% to 0.5%, with the bank looking at a bank rate of 0.5% to stop reinvesting maturing assets and a rate of 1.0% to start selling assets and reducing its balance sheet . Market participants are mixed about what this means (it’s positive since the bank has enough confidence to lower the balance sheet even while rates are low, but on the other hand it means rates can stay lower for longer which is a negative). However, all in all the most important take away was the continued optimism about the economy despite virus uncertainty and comments that modest tightening will be required. 3. The country’s economic developments Hopes of a fast economic recovery has seen the BOE and IMF upgrade GDP projections for the UK which has widened the growth differentials between other major economies and has been a positive input for GBP. However, a lot of these positives are arguably already reflected in the price which means a continuation of the recent misses in economic data could make further solid gains more difficult for the GBP to maintain. Even though the announcement of more fiscal tightening than expected saw some short-term downside in Sterling, the hawkish comments from the BoE more than offset the prior negative sentiment and provided a solid push higher, and as long as there aren’t any more fiscal tightening surprises it should not matter much for GBP in the med-term . This week’s data dump will be important, but probably not enough to alter the outlook for monetary policy . 4. Political Developments Remember Brexit? Yeah, me neither, but recent rhetoric between the UK and EU hasn’t gone in a very positive direction with the UK side explaining to the EU that they are looking at all the options on the table (including article 16) if they can’t reach an agreement with the EU regarding the Northern Ireland Protocol. For now, Sterling has looked through all the rigmarole and should continue to do so as long as the cans are kicked down the road. 5. CFTC Analysis Latest CFTC data for the GBP (updated until 7 Sep) showed a positioning change of -9624 with a net non-commercial position of -24524. The recent flush lower in positioning means current levels for GBP still look attractive for med-term buyers, especially after the hawkish BoE comments. However, the short-term upside does look stretched at -2.07 and -2.45 standard deviation so watch out for possible mean reversion. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish . 2. SNB Intervention Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind. In a recent note ING investment provided their rationale for the recent strength in the CHF and suggests that the lower inflation in Switzerland compared to the EU means the real trade-weighted CHF is trading too cheap. Furthermore, the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful intervention lately. However, as intervention is always the possibility it’s a risk to always keep in mind when trading the CHF. 3. CFTC Analysis Latest CFTC data for the CHF (updated until 7 Sep) showed a positioning change of -3755 with a net non-commercial position of +220. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF still the third largest net-long positioning among the majors, which is at odds with the current fundamental bearish outlook for the currency. Even though we expect the currency to weaken in the med-term , any drastic escalation in risk off tones could still continue to provide support for the safe-haven currency.
by thunderpips
1
GBP CHF - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: BULLISH 1. Virus Situation The successful vaccination program has allowed the UK to open up faster and sooner than peers & provides a favourable environment for GBP. 2. The Monetary Policy outlook for the BOE The BoE meeting on 5 August provided a flurry of comments with something for both the doves and the hawks. The QE vote split was more dovish (7-1) with BoE’s Saunders the only dissenter, while upgrades to growth and inflation were positive, even though price pressures is still views as mostly ‘transitory’. Reasons for a patient stance was the uncertainty surrounding the virus at the time as well as waiting for the end of the furlough scheme to assess the impact on the labour market. Thus, the bank will be in wait-and-see mode until at least Oct or Nov. The other important change was the reduction in the bank’s QT threshold from 1.5% to 0.5%, with the bank looking at a bank rate of 0.5% to stop reinvesting maturing assets and a rate of 1.0% to start selling assets and reducing its balance sheet . Market participants are mixed about what this means (it’s positive since the bank has enough confidence to lower the balance sheet even while rates are low, but on the other hand it means rates can stay lower for longer which is a negative). However, all in all the most important take away was the continued optimism about the economy despite virus uncertainty and comments that modest tightening will be required. 3. The country’s economic developments Hopes of a fast economic recovery has seen the BOE and IMF upgrade GDP projections for the UK which has widened the growth differentials between other major economies and has been a positive input for GBP. However, a lot of these positives are arguably already reflected in the price which means a continuation of the recent misses in economic data could make further solid gains more difficult for the GBP to maintain. The other factor to watch is potential tightening of the fiscal taps by the government with proposals of higher National Insurance taxes to fund the government’s planned social care overhaul. For now, this doesn’t change the med-term outlook, but if the proposed tax hikes are enough to see expectations of robust consumer spending being paired back that could be a strong med-term headwind for the Pound. 4. Political Developments Remember Brexit? Yeah, me neither, but recent rhetoric between the UK and EU hasn’t gone in a very positive direction with the UK side explaining to the EU that they are looking at all the options on the table (including article 16) if they can’t reach an agreement with the EU regarding the Northern Ireland Protocol. For now, Sterling has looked through all the rigmarole and should continue to do so as long as the cans are kicked down the road. 5. CFTC Analysis Latest CFTC data for the GBP (updated until 31 August) showed a positioning change of +1845 with a net non-commercial position of -14900. The recent flush lower in positioning means current levels for GBP still look attractive for med-term buyers. There are med-term risks on the horizon as we’ve explained above but we maintain med-term longs from 1.3700 and will look to add more incremental longs in the weeks ahead. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish . 2. SNB Intervention Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind. In a recent note ING investment provided their rationale for the recent strength in the CHF and suggests that the lower inflation in Switzerland compared to the EU means the real trade-weighted CHF is trading too cheap. Furthermore, the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful intervention lately. However, as intervention is always the possibility it’s a risk to always keep in mind when trading the CHF. 3. CFTC Analysis Latest CFTC data for the CHF (updated until 31 August) showed a positioning change of -119 with a net non-commercial position of +3975. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF still the third largest net-long positioning among the majors, which is at odds with the current fundamental bearish outlook for the currency. At the current level of positioning, one has to argue that the CHF offers attractive levels to sell into, especially versus the NZD which will is expected to offer very attractive carry yield if the RBNZ moves ahead with their planned hike projections. However, there might have been idiosyncratic factors providing support for the CHF, and any drastic escalation in risk off tones could still continue to provide support for the safe-haven currency.
by thunderpips
7
Wait for downtrend confirmation and sell signal with GBPCHFH4 time frame. Structure: Strong downtrend. After a strong downward move, the price formed an ascending channel, this channel hit resistance at 1.26500. Here, waiting for the price to break through the ascending channel and appear confirmation of the downtrend, then you can enter a sell order with GBPCHF. The profit target is the 1.24000 price zone. ----------------------------------------------------------------------------------------------- Wish you all have a good trading day!
Short
by tradafx
3
GBP CHF - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: BULLISH 1. Virus Situation The successful vaccination program has allowed the UK to open up faster and sooner than peers & provides a favourable environment for GBP. 2. The Monetary Policy outlook for the BOE The BoE meeting on 5 August provided a flurry of comments with something for the doves and the hawks. The QE vote split was a tad more dovish with a 7-1 split with BoE’s Saunders to only dissenter, while the upgrades to growth and inflation were positive but with similar comments of ‘transitory’ price pressures muting any real market impact . The reasons for the bank to remain patient right now in terms of policy normalization is the current uncertainty surrounding the virus and of course the bank waiting for the end of the furlough scheme to assess the impact on the labour market. That means, that the bank would arguably be in wait-and-see mode until at least October or November. The other change that was important to take note of was the reduction in the bank’s QT threshold from 1.5% to 0.5%, with the bank looking at a bank rate of 0.5% to stop reinvesting maturing assets and a rate of 1.0% to start selling assets and reducing the balance sheet . Market participants are mixed about what this means for the bank as on the one end it’s positive since the bank has enough confidence to lower the balance sheet even while rates are low, but on the other end it also means that rates can stay lower for much longer which is more negative. Arguably the most important comments to take away was their continued optimism about the economy despite the uncertainty as well as their comments that modest tightening will be required. 3. The country’s economic developments Hopes of a fast economic recovery has seen the BOE and IMF upgrade GDP projections for the UK which has widened the growth differentials between other major economies by quite a bit. As the economy continues to rebound this should continue to be supportive for GBP as long as the data reflects that. Something to be mindful of is that a lot of these positives are arguably reflected in the price. Thus, if we start to see some disappointing data, that could mean that decent upside would be more difficult for Sterling to maintain. 4. Political Developments Remember Brexit? Yeah, me neither, but this week the rhetoric between the two sides continued to go in the wrong direction with the UK side explaining to the EU that they are looking at all the options on the table (include article 16) if they can’t reach an agreement with the EU regarding the Northern Ireland Protocol. For now, Sterling has looked through all the rigmarole and should continue to do so as long as the cans are kicked down the road. 5. CFTC Analysis Latest CFTC data for the GBP (updated until 17 August) showed a positioning change of -21396 with a net non-commercial position of -16745. The big push lower in positioning means current levels for GBP still look attractive for med-term buyers, especially with the positioning seeing quite a flush lower in the past few weeks. The miss in both retail sales and inflation last week did see some additional pain on the Pound two weeks ago, and this week’s flash PMI’s didn’t help either, but med-term outlook remains bullish and thus positioning attractive at these levels. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish . Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind. In a recent note ING investment provided their rationale for the recent strength in the CHF and explained that the lower inflation in Switzerland compared to the EU means the real trade-weighted CHF is actually trading too cheap. Furthermore, the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, and without any meaningful FX intervention the CHF runs the risk of slowly creeping higher, especially versus the EUR. 2. CFTC Analysis Latest CFTC data for the CHF (updated until 17 August) showed a positioning change of -1543 with a net non-commercial position of +4094. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF still the third largest net-long positioning among the majors, which is at odds with the current fundamental bearish outlook for the currency. At the current level of positioning, one has to argue that the CHF offers attractive levels to sell into, especially versus the NZD which will is expected to offer very attractive carry yield if the RBNZ moves ahead with their planned hike projections. However, there might have been idiosyncratic factors providing support for the CHF, and any drastic escalation in risk off tones could still continue to provide support for the safe-haven currency.
by thunderpips
3
GBP CHF - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: BULLISH 1. Virus Situation The successful vaccination program has allowed the UK to open up faster and sooner than peers & provides a favourable environment for GBP. 2. The Monetary Policy outlook for the BOE The BoE meeting on 5 August provided a flurry of comments with something for the doves and the hawks. The QE vote split was a tad more dovish with a 7-1 split with BoE’s Saunders to only dissenter, while the upgrades to growth and inflation were positive but with similar comments of ‘transitory’ price pressures muting any real market impact . The reasons for the bank to remain patient right now in terms of policy normalization is the current uncertainty surrounding the virus and of course the bank waiting for the end of the furlough scheme to assess the impact on the labour market. That means, that the bank would arguably be in wait-and-see mode until at least October or November. The other change that was important to take note of was the reduction in the bank’s QT threshold from 1.5% to 0.5%, with the bank looking at a bank rate of 0.5% to stop reinvesting maturing assets and a rate of 1.0% to start selling assets and reducing the balance sheet . Market participants are mixed about what this means for the bank as on the one end it’s positive since the bank has enough confidence to lower the balance sheet even while rates are low, but on the other end it also means that rates can stay lower for much longer which is more negative. Arguably the most important comments to take away was their continued optimism about the economy despite the uncertainty as well as their comments that modest tightening will be required. 3. The country’s economic development s Hopes of a fast economic recovery has seen the BOE and IMF upgrade GDP projections for the UK which has widened the growth differentials between other major economies by quite a bit. As the economy continues to rebound this should continue to be supportive for GBP as long as the data reflects that. Something to be mindful of is that a lot of these positives are arguably reflected in the price. Thus, if we start to see some disappointing data, that could mean that decent upside would be more difficult for Sterling to maintain. 4. Political Developments Remember Brexit? Yeah, me neither, but this week the rhetoric between the two sides continued to go in the wrong direction with the UK side explaining to the EU that they are looking at all the options on the table (include article 16) if they can’t reach an agreement with the EU regarding the Northern Ireland Protocol. For now, Sterling has looked through all the rigmarole and should continue to do so as long as the cans are kicked down the road. 5. CFTC Analysis Latest CFTC data for the GBP (updated until 17 August) showed a positioning change of -21396 with a net non-commercial position of -16745. The big push lower in positioning means current levels for GBP still look attractive for med-term buyers, especially with the positioning seeing quite a flush lower in the past few weeks. The miss in both retail sales and inflation last week did see some additional pain on the Pound two weeks ago, and this week’s flash PMI’s didn’t help either, but med-term outlook remains bullish and thus positioning attractive at these levels. CHF FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish . Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind. In a recent note ING investment provided their rationale for the recent strength in the CHF and explained that the lower inflation in Switzerland compared to the EU means the real trade-weighted CHF is actually trading too cheap. Furthermore, the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, and without any meaningful FX intervention the CHF runs the risk of slowly creeping higher, especially versus the EUR. 2. CFTC Analysis Latest CFTC data for the CHF (updated until 17 August) showed a positioning change of -1543 with a net non-commercial position of +4094. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF still the third largest net-long positioning among the majors, which is at odds with the current fundamental bearish outlook for the currency. At the current level of positioning, one has to argue that the CHF offers attractive levels to sell into, especially versus the NZD which will is expected to offer very attractive carry yield if the RBNZ moves ahead with their planned hike projections. However, there might have been idiosyncratic factors providing support for the CHF, and any drastic escalation in risk off tones could still continue to provide support for the safe-haven currency.
by thunderpips
2