GBP/CHF: Trading below its 200 DMA as trade wars are about to begin

• Price action in the US session to be dictated by sentiment and technicals.
• GBP/CHF key resistance is seen at 1.3025 . 

The GBP/CHF is trading at around 1.2950 up 0.22% consolidating above the 200-period DMA. Both British Pound and Swiss Franc are up against the US Dollar as Trump is speaking loud about imposing tariffs on iron and aluminum.

No major news is expected from UK nor Switzerland in the US session. Therefore prices will likely be dictated by sentiment and technicals. However, the British Pound is vulnerable to any news coming from the EU-UK trade deal. 

What helped to keep the Sterling supported was, earlier in the European session, the UK services PMI which came out above expectation at 54.5. It was expected to rise to 53.3 in February.

GBP/CHF daily chart

On the daily chart, the GBP/CHF seem to have found some support above the 200-simple moving average. The price rebounded on Friday and since then it seems that the market is in consolidation mode. Intraday support is seen at the psychological 1.2900 level which is the low of last week which rebounded from the 200-period simple moving average. Next support is the 1.2800 psychological level coupled with the 38.2% Fibonacci retracement from the October 2017-February 2018 bull run. Further down, support is seen at the 1.2600 level with the 50% Fibonacci retracement.   

GBPCHF 4-hour chart

The 4-hour chart is offering us a more detailed view of where future resistance can be found. The 1.3025 level with the 100-hour simple moving average and the 23.6% Fibonacci retracement, from the last swing down as seen on the chart, is likely to provide resistance. Further up, the 1.3100 figure area, combined with the 38.2% Fibonacci retracement and the 200-simple moving average is the next key resistance.