The Swiss Franc (CHF) weakens against the Pound Sterling (GBP) for the seventh day in a row on Wednesday as the Governor of the Bank of England (BoE), Andrew Bailey, testifies before members of Parliament at the UK Treasury Select Committee. Overall market sentiment is positive, with the Dow Jones Industrial Average and S&P 500 both edging higher at the time of writing. This marginally aids the Pound more than the safe-haven Swiss Franc. GBP/CHF – the number of Swiss Francs (CHF) that one Pound Sterling (GBP) can buy – rises for the seventh consecutive day, extending the short-term recovery rally. The pair is in no clear trend on any time frame, however, and despite the recovery rally entering its seventh day, even the short-term trend is debatable.

Analyzing GBP/CHF’s short-term trend using the 4-hour chart gives a mixed picture. Whilst the peaks and troughs are rising in a month-long series of higher highs and lows ever since the late November lows, the pair still has not broken above the critical 1.0900 level (last key lower high of the prior downtrend), which would provide more confidence that the trend had flipped from down to up. The Relative Strength Index (RSI) is rising in line with price, suggesting the uptrend retains underlying strength. It has not entered the overbought region, which would indicate a growing risk of a pullback. A further indication of strength is that it has broken above the 50 and 100 four-hour Simple Moving Averages (SMA). That said, the speed of the move higher since the November lows has been rather slow when compared to the down move that preceded it – a sign this recovery could merely be a pullback within a broader downtrend. A break below 1.0794 would suggest a recapitulation and the beginning of a new leg lower. A break above the day’s highs would suggest a continuation higher to just below the key 1.0900 level. A break above that would confirm a change in trend and more upside.