During the course of the session on Tuesday, the GBP/CHF pair fell significantly. However, we found more than enough support at the 1.45 level to turn things back around towards the end of the day and bounce all the way to the 1.46 level. Because of this, I feel that it is only a matter of time before the buyers step back into this marketplace and try to push it higher.
With that being the case, if we break down below the 1.45 level that would of course change my mind completely. I do recognize that this pair has broken down significantly lately, so I think that we should see a bit of a bounce as the market may have gotten ahead of itself. However, all over the Forex world you can see that the British pound is rather soft, and as a result it would not surprise me at all at this market breaks down.
Vital crossroads
I believe that we are at a vital crossroads at the moment, as the 1.45 level is of course a rather big deal. If we can form some type of supportive candle on a daily chart, I am more than willing to start buying as I think the market will more than likely bounce towards the 1.48 level again. However, if we break down I feel that the market probably drops all the way down to the 1.41 handle, if not the 1.40 level. I believe that the 1.45 level is essentially the “crossroads” as to where we go next.
Keep in mind that the Swiss National Bank continues to work against the value of the Swiss franc in general, but the British pound continues to fall apart. This might be the one anomaly when it comes to the Swiss franc, as this pair may continue to drop even in the face of strength in other pairs such as the EUR/CHF and the USD/CHF.
