Swiss Franc weakens vs Sterling after Bailey’s speech

The Swiss Franc declined against the Pound Sterling for the seventh consecutive trading day, as the Bank of England Governor, Andrew Bailey, testifies before Parliament at the UK Treasury Select Committee. The Dow Jones Industrial Average and S&P 500 are edging higher, marginally aiding the Pound more than the Swiss Franc.

BoE Governor Bailey stressed the need to return inflation to target at a Treasury Select Committee meeting, citing a decrease in mortgage strain and rising household incomes. This suggests the Bank of England is unlikely to cut interest rates, unlike other central banks, including the Federal Reserve, which is considering cuts in 2024.

The GBP/CHF pair has risen for the seventh consecutive day, extending the short-term recovery rally. However, the short-term trend is debatable and the Relative Strength Index (RSI) is rising in line with price, suggesting the uptrend retains underlying strength.

The pair has not entered the overbought region, indicating a growing risk of a pullback. A break below 1.0794 could suggest a recapitulation and a new leg lower, while a break above the day’s highs could suggest a continuation higher to the key 1.0900 level.