- At this point, the market is likely to continue to look at the 1.15 level as a major ceiling, and the fact that we have fallen so hard will certainly scare some traders away.
- However, it’s also worth noting that we continue to knock on the door of the ceiling, and of course the interest rate differential favors the British pound, and therefore I think given enough time we eventually do break out.
Swiss National Bank
Keep in mind that the Swiss National Bank has no interest in seeing a strong Swiss franc at the moment, so you won’t have some of the noise and concerns that you have dealing with the Japanese yen at the moment. After all, the Japanese have intervened a few times, although they will end up losing. In this particular pair, the Swiss really don’t have any issue with the depreciation of their currency at this point, because it has been so strong for so long. In that sense, you do have a bit of a tailwind in this pair that you don’t have in some others.
All things being equal, I do believe that we have a situation where sooner or later the buyers come back in and take advantage of the interest rate differential, as it does pay so well at the end of each session. Remember, institutional traders pay close attention to this, and given enough time I do think that it is a main driver here. At this point, I think there is plenty of support all the way down to the 1.13 level, with the 50-Day EMA city just above there. In general, this is a pair that I’m looking for value to take advantage of.
Top Regulated Brokers
That being said, if we were to simply turn around and rip through the upside, I think at that point you also have to consider getting long in GBP/CHF pair because at that point in time it would be very likely to see this pair reaching toward the 1.20 level over the longer term. Obviously, that would be something that would take some time to accomplish.
Ready to trade our daily Forex forecast? Here’s some of the top forex online trading UK to check out.