GBPCHF: Forex Trading Online Elliott Wave Correction – June 17, 2014

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GBPCHF: Forex Trading Online Elliott Wave Correction - June 17, 2014

GBPCHF: Forex Trading Online Elliott Wave Correction - June 17, 2014

The British pound has been on a strong forex trading online rally against its counterparts ever since BOE Governor Carney hinted that the central bank might need to hike interest rates sooner rather than later. He mentioned that surging home prices could stoke inflationary pressures and warrant monetary policy tightening.

GBP/CHF paused from its recent climb though, as some bulls probably took profits off key levels already. This could pave the way for a corrective wave and allow buyers to enter at a better price.

The 4-hour forex trading online chart shows that the 100 SMA might act as a good support zone as this lines up with the 1.5100 major psychological support. Going long there with a stop below the 200 SMA could yield a 3:1 trade if one aims for the previous highs.

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Forex Trading Online Analysis

As for the Swiss franc, the odds favor a selloff now that the SNB decision is coming up. Remember that SNB head Jordan hinted that the central bank might follow the ECB’s footsteps if they decide to ease. After all, the SNB is intent on defending its EUR/CHF peg and the pair is moving close to the 1.2000 floor. Further declines or weak PPI today could convince the Swiss central bank to ease or intervene.

In that rare case, the franc might sell off heavily against the British pound in forex trading online. This could push GBP/CHF past the previous highs at 1.5300 and all the way up to the 1.5500 area or beyond.

On the other hand, lack of action from the SNB’s end might lead to a bit of support for the franc. It is more likely though that the pound could draw support from UK reports due this week, namely the CPI and retail sales. BOE minutes are also up for release and might echo Carney’s hawkish remarks.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com