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The BOE statement is coming out, and it looks like the announcement might be enough to keep the Sterling afloat.

GBP/CHF is bouncing off an area of interest and is setting its sights higher again.

Before we look at the setup, you should first see the list of market-moving headlines during the Asian session:

Major FX Pairs Price Performance from MarketMilk
Major FX Pairs Price Performance from MarketMilk

Upcoming Potential Catalysts on the Economic Calendar:

  • German factory orders at 6:00 am GMT
  • BOE monetary policy decision and MPC minutes at 6:00 am GMT

What to Watch: GBP/CHF

GBP/CHF 1-hour Forex Chart
GBP/CHF 1-hour Forex Chart

A bit of risk appetite seems to be returning to the markets as the spotlight returned to vaccine developments and government stimulus.

In addition, the pound could get a boost from the upcoming BOE decision, as policymakers are expected to keep rates and asset purchases unchanged. Officials might also highlight the positive developments in the U.K. economy, as well as the slowdown in coronavirus cases.

If that’s the case, GBP/CHF could see more upside throughout the session, finding support at the mid-channel area of interest and aiming for the swing high next.

However, if risk-off flows return in the next few hours, this pair might be in for a larger pullback to the 61.8% Fib closer to the channel bottom.

The 100 SMA is above the 200 SMA to confirm that support levels are more likely to hold than to break, so there’s a good chance that the uptrend could carry on. At the same time, Stochastic is pulling out of the oversold region to reflect a return in bullish momentum.

If you’re hoping to catch some gains off this currency pair, don’t forget to take note of the average GBP/CHF volatility when setting stops and targets!