Short-Term Pressure Mounts on GBP/CHF Amid U.S. Election Uncertainty

Market Overview

On Monday, the GBP/CHF currency pair faced heightened selling pressure as the market sentiment shifted in favor of safe-haven assets, notably the Swiss Franc, ahead of the highly unpredictable U.S. presidential election. Investors opted for risk aversion, moving into currencies considered safer amidst mounting uncertainties. The prospect of volatility and an uncertain outcome in the U.S. election has dampened demand for risk-linked assets, putting downward pressure on the British Pound.

Adding to the bearish sentiment, Switzerland’s relative stability and the resilience of the Franc made it an appealing destination for capital flows seeking safety. Meanwhile, the market was also anticipating the upcoming release of U.K. PMI data, which has potential implications for economic sentiment and policy expectations. This caution among investors helped sustain the bearish undertone for GBP/CHF.

Technical Analysis

On the one-hour chart, GBP/CHF has breached its 100-period moving average, confirming intensified selling momentum. This move follows a break below the critical support level at 1.12234, indicating that sellers have seized control. If they manage to maintain the price below the immediate resistance at 1.12096, the downside targets are projected at 1.12011, 1.11950, and ultimately 1.11873. These levels represent crucial areas that could further attract selling activity.

Oscillators Confirmations

The moving averages exhibit a mixed alignment, with a slight bias towards bearish sentiment, while the RSI remains below the 50 mark, reflecting persistent selling pressure. The MACD also confirms a bearish trend, as the signal line diverges downward, highlighting negative momentum. Traders are closely watching these indicators for signs of a continuation or reversal.

Alternative Scenario

In contrast, a reversal scenario would necessitate a decisive break above 1.12457. Such a move would indicate that buyers are regaining control, potentially shifting the trend direction to an upward trajectory. However, for this to materialize, a strong catalyst—likely a significant political or economic development—would be required to counteract the current safe-haven flows.

Key Technical Levels

Resistance Levels:

• Resistance 1: 1.12096
• Resistance 2: 1.12173
• Resistance 3: 1.12234
• Resistance 4: 1.12457

Current Price: 1.12071

Support Levels:

• Support 1: 1.12011
• Support 2: 1.11950
• Support 3: 1.11873

Key Events to Monitor

Key events likely to shape GBP/CHF’s near-term movement include the U.S. election results and the release of U.K. Purchasing Managers’ Index (PMI) figures on Tuesday. The PMI data will be crucial in assessing the strength of the U.K. economy, which could influence the outlook for the Pound. Likewise, the election outcome is expected to inject further volatility into global currency markets, determining investor sentiment and risk appetite.

Conclusion

GBP/CHF is experiencing mounting selling pressure as the market shifts toward safe-haven assets like the Swiss Franc, driven by U.S. election uncertainty. Technical indicators suggest further downside risks unless key resistance levels are broken, which could change the current bearish outlook.