The GBP/CHF pair initially fell during the session on Thursday, breaking down to the 1.50 level. However, you have to keep in mind that large money laced to trade at large, round, psychologically significant numbers. I can think of very few numbers it would be more psychologically significant than “one and a half”, so therefore it does not surprise me that the buyers have come back into this marketplace. You can see that we have formed a bit of a hammer, and that of course is very supportive as well. The 50 day exponential moving average is just below, and it has been one of those averages every time that traders tend to pay attention to. On top of that, you have to keep in mind that the British pound is at least “holding its own” against the US dollar overall. Because of this, I believe that the British pound will continue to be stronger than most other currencies.
Swiss National Bank
The Swiss National Bank has worked against the value of the Swiss franc in general, and as a result I believe that the value the CHF will continue to fall. It is typically believe that most of their work has been done in the EUR/CHF pair, the reality is that the SNB has intervened in this particular pair in the past as well. With that, I think that it only adds to the idea of a stronger British pound against the Swiss franc.
Ultimately, I do think that we reach towards the 1.55 handle, and continue to perhaps even go higher than that. We will have to wait and see but I have to admit that this is one of the more bullish pairs as far as the Swiss franc is concerned. We have almost completely wiped out the “meltdown” that happen once the Swiss National Bank abandoned the currency peg. This pair is simply leaving the way for all of the Swiss franc related markets.
