FxWirePro: GBP/CHF bounces off trendline support, mixed UK PMIs fail to impress GBP bulls

Chart - Courtesy Trading View 

GBP/CHF was trading 0.18% higher on the day at 1.1359 at around 10:35 GMT. The pair is extending previous session's bounce off trendline support. However, upside remains capped at 5-DMA. Mixed UK PMIs fail to impress GBP bulls.

Data Released:

The seasonally adjusted S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) unexpectedly slips into contraction to 46.0 in August versus 51.1 expected and 52.1 in July.

UK Services PMI for August arrived at 52.5 when compared to July’s final score of 52.6 and 52.0 expected.

Further, the S&P Global/CIPS Composite PMI came in at 50.9 in August vs. 51.1 expected and 52.1 previous.

Technical Analysis:

- GBP/CHF upside capped at 5-DMA

- Bullish RSI divergence keeps scope for upside

- Volatility is high and rising as evidenced by wide Bollinger bands

- GMMA indicator shows major and minor trend are bearish

Major Support Levels: 

S1: 1.13 (Trendline) 

S2: 1.1294 (Lower BB)

Major Resistance Levels: 

R1: 1.1379 (5-DMA)

R2: 1.1484 (21-EMA)

Summary: GBP/CHF upside lacks traction. The unexpected slump in UK Manufacturing PMI checks upside in the pair. Major trend is bearish. Break below trendline support will plummet prices.