The GBP/CHF pair continues to track the risk appetite of global markets as it typically will do from time to time. During the session on Tuesday, we saw the 1.4750 level offered enough support to send the market higher. In fact, we wiped out roughly 85% of the losses from the Monday session at one point during the day. We closed at the upper part of the range for the session on Tuesday, and as a result it looks like the market is probably going to continue higher. After all, you can see that we have chopped back and forth but certainly have an upward bias.
On top of that, the market bounced off of the 50 day EMA, which of course is a very commonly used moving average by traders around the world. The fact that the 50 day EMA coincides with roughly the 1.4750 level helps as well, and as a result enough things line up at the same time to get me bullish about this marketplace.
Watch the world’s stock markets.
In order to understand where this pair is likely to go, you want to watch the world stock markets. That’s because the pair tends to follow risk appetite in general, and as risk appetite increases, so does the value of stocks around the world. It doesn’t necessarily have to be in Great Britain or Switzerland, just the general attitude of stock markets is enough of an indicator for me to start buying this pair. With the fact that we had such a negative candle on Monday, I am going to wait until we get above the highs from the Monday session in order to go long of this market yet again. I believe that the 1.50 level offered enough resistance previously based mainly upon the round number aspect of it, but now I believe that the market is gaining enough momentum to finally break above that level. Once we get above the 1.50 handle, I would fully expect that to be a bit of a floor in the market. That being said, I am bullish of this market.
