The GBP/CHF pair fell during the majority of the session on Wednesday, but as you can see found support below the 1.45 handle. The 1.45 handle is of course a large, round number and the site of several support and resistance barriers over the last several months. With that, it makes sense that the market would react to this level, but now I find myself drawing a trend line now that sits just below the current price action. With that, I think that it’s only a matter time before the buyers return. After all, the British pound has generally been positive recently until the last few sessions.
The Swiss franc is of course a safety currency, so fear driven headlines could push this pair lower. However, from a technical standpoint it does look like a bounce would make a lot of sense here. If we can get that bounce above the 1.4550 area, it’s very likely that we would then head to the 1.48 handle, and then possibly the 1.50 handle given enough time.
Swiss franc intervention?
During the session on Wednesday, there was a sudden spike in most of the CHF related pairs. This pair of course wasn't any different, and as a result one has to wonder whether or not the Swiss National Bank had something to do with it. If they did, it could be there way of nudging the market in the “proper” direction. Also, let us not forget that they have massive positions on right now, and will have to square them away from time to time. That is the price of admission when it comes to intervention. Having said that, the SNB can obviously print as many Swiss francs as they want.
With this, I think we just simply are going to continue the uptrend that we have seen for several months now, and as a result I think that this could end up being a decent buying opportunity. If we break down below the trend line, which is essentially the bottom of the range for the session on Wednesday, I am simply going to step away from this market and let it try to regroup near the 1.42 handle
.