The GBP/CHF pair is one that has been drifting lower for some time now. Part of this is because of the fear of a so-called "triple dip recession" in the United Kingdom. On the other hand, you have the Swiss franc that is considered somewhat of a safer currency than the British pound, and as a result it has a natural attraction to traders looking for a safe place to park their money.
Within this chart however, you can see that we got a wicked bounce just above the 1.45 level on Friday. This is a large and important level on the longer-term charts, and the hammer that formed for the session was just about perfect. While I am not one to catch falling knives, I have to admit the fact that the British pound formed a hammer against not only the Swiss franc but the US dollar on Friday does suggest to me that a bounce is coming.
Target
Of course, having said that there is a bounce coming is one thing but knowing where they could go is a completely different question. I believe that if we can get a nice bounce going and a break above the top of the hammer for Friday, we could see the pair target the 1.50 level again. It would be a choppy ride, but we should also keep in mind that the Swiss National Bank is very long of this pair. There is a good chance of the Swiss may step in and supported if it keeps falling anyways.
Ultimately, it does look like the British pound has been sold off rather drastically, and probably a bit too much. After all, the British pound is a currency that typically does well in times of "risk on", and we certainly seem to be in one of those time periods right now. Stock indices around the world are breaking out to the upside, so it makes sense that people will look for a slightly higher yield in the currency markets. This is an excellent pair for just that type of move historically.