A busy economic calendar did not translate to volatility during the Asian session.
Will GBP/CHF see more action with the U.K.’s final GDP release?
Before we talk about GBP/CHF’s chart, take a look at the top headlines that dominated Asian session trading:
- Fed’s Williams says he’s not worried about inflation hobbling an improving economy
- Quarles says central banks played role in Treasuries strains
- Oil inventories fell by 831,000 barrels last week: API
- WTO backs EU tariffs on $4 billion U.S. goods over Boeing subsidies
- NZ’s small dwellings approvals hit highest level since early 1990s
- U.K. shop prices continue to fall as retailers try to woo back shoppers
- Australian housing’s resilience buoyed by cheap and easy credit
- Japan’s August industrial output up 1.7% for third straight monthly rise
- Japan August retail sales fall 1.9% year/year (vs. -2.0% expected)
- NZ business outlook lifted a little from early-September preliminary reads
- China’s manufacturing activity expanded in September ahead of Golden Week holidays
- China’s Caixin manufacturing gauge inches down
- Fed’s Kaplan says economy won’t get back on track until late 2022
- Dollar holds line after Trump, Biden clash in first debate
Upcoming Potential Catalysts on the Economic Calendar:
- Germany’s retail sales at 6:00 am GMT
- U.K.’s current account balance at 6:00 am GMT
- U.K.’s final GDP reading at 6:00 am GMT
- U.K.’s Nationwide house price index at 6:00 am GMT
- France’s preliminary CPI at 6:45 am GMT
- Switzerland’s KOF economic barometer at 7:00 am GMT
- ECB President Lagarde to give a speech at 7:20 am GMT
- Germany’s unemployment rate at 7:55 am GMT
- BOE’s Haldane to give a speech at 8:30 am GMT
- U.S. ADP report at 12:15 pm GMT
What to Watch: GBP/CHF
GBP/CHF is consolidating around 1.1800, which lines up with a mid-channel, 50% Fib retracement AND a previous resistance level on the 4-hour time frame.
If the key inflection point is not enough to catch your interest, then you should also know that the pair is showing us a bullish divergence on the chart.
The U.K. is printing the final reading of its Q2 2020 GDP. Word around is that it will be revised down from -1.7% to -21.7%, which will mark the deepest recession recorded for the economy.A worse-than-expected release would mean that the economy is already that much weaker even before Britain (likely messily) exits the EU.
Given that the GBP/CHF tends to move by around 90 pips on Wednesdays, we could see a trip to the channel support closer to 1.1700.
If the report comes in much better than expected, however, or if we see positive headlines about the ongoing Brexit negotiations, then GBP/CHF could extend its uptrend and hit 1.1900 near the 200 SMA.
