The GBP/CHF pair typically moves rather rapidly, so the fact that once we broke out we just simply sat hearing consolidated was a bit surprising to me. As the market fell on Friday, we simply recovered most of the gains that we had seen in the British pound from Thursday. However, the 1.4650 level of course did offer support, so this tells me the market isn’t quite ready to move yet. Normally, that would be a bit concerning, but at the end of the day the currency markets in general very sluggish and quiet Friday overall. With that being the case, it’s a bit much to ask a lot of motion out of this particular currency pair.
I think that the British pound continues to strengthen overall, and that it will see itself manifest in this market as well. I think that the British pound has been unfairly beaten up due to European concerns, and as a result I think there’s a bit of a repricing of risk right now when it comes to the United Kingdom. On top of that, when you look at this pair you can clearly see that the resistance at the 1.4650 level is starting to act as support.
Friday showed a bit of support
Even though we fell during the Friday session, at the end of the day we did see the buyers step back into this market and keep it afloat. Because of this, I believe that it’s only a matter of time before we break out to the upside and perhaps try to reach the 1.50 level. Again though, this is summertime trading so it’s difficult to imagine this being a very quick move. With that being the case, I think you’re going to have to be patient but it’s only a matter of time before we reach higher and I think that short-term pullbacks will continue to be potential buying opportunities. This is a necessarily my favorite trade out there, but I do think that it is a valid one.
