The GBP/CHF is another currency pair that is in the consolidation stage for the third month, in the range of 1.2579-1.2829 CHF. The rates are near the highest level in two years, but the pound cannot find new incentives for growth due to weak macroeconomic indicators and the spreading of the coronavirus in the UK, with the most dangerous strain of Delta.
During the last week, the pound was under a new wave of negativity, as the number of Covid infections began to grow, and the announced lifting of most quarantine restrictions, scheduled for July 19, turned out to be questionable. In the UK at the moment business, especially in the service sector, is still operating under quarantine and cannot develop fully. This is reflected in the macroeconomic indicators: the GDP is much lower than the forecasts and growth rates in the pre-pandemic period; industrial production volumes are also declining. Business activity is growing, but so far this is not enough for investors' confidence in the pound.
In Switzerland, with the economic and epidemiological situation, we observe a better situation, but a safe currency is not the asset that investors now prefer. In addition, the Swiss National Bank is opposed to the strengthening of the CHF and periodically enters the foreign exchange market with interventions.
Next week investors will focus on the consumer price index, as well as data on unemployment in Britain for May. It is expected that the situation will not change during this period and the indicators will remain at the same level. At the same time, it should be noted that unemployment in Britain is one of the lowest in the region and is only 4.7%. However, the pressure from the pandemic may be increasing in the United Kingdom. Therefore, consolidation is likely to continue. Most technical analysis tools indicate the effectiveness of the deals in favor of the CHF, but the decline will be limited, as well as possible growth. In the absence of perspectives of improving macroeconomic indicators, our choice for today are the deals to SELL. Also, the entry points to the market can be indicated at the levels of 1.2579 and 1.2829.
