During the session on Tuesday, the GBP/CHF pair rallied significantly, breaking towards the 1.41 handle. We broke above the top of a hammer from the Monday session which of course is bullish, even though the hammer was in at the bottom of a massive downtrend. It simply looked very much like a market that is trying to continue the upward momentum. Because of this, the market has caught my attention, and now I am even more interested, due to the fact that it appears we could have a potential inverse head and shoulders. This of course is a very bullish sign, and a move above the so-called “neckline” would send buyers back into the market. Either way, I feel as if the market is certainly trying to turn around completely.
Swiss franc weakness
In general, the Swiss franc has suffered a bit recently, and the British pound has been given a little bit of a reprieve due to the fact that perhaps we have oversold and reacted to the potential exiting of the European Union by the United Kingdom. On top of that, the Swiss National Bank is a very aggressive in punishing those who are trying to deposit money, so quite frankly the Swiss franc is going to continue to suffer at the hands of traders that are conscientious of interest-rate differentials.
We can break above the line on the chart, I think this becomes a buy-and-hold type situation, probably reaching to the 1.48 region. That of course could give us nice profits in this pair does tend to be very quick to move when it makes up its mind. It’s not necessarily the most liquid pair in the world, although I don’t have any fear trading it. At this point in time, pullbacks to show signs of support could be buying opportunities as well, and I don’t really have any interest in selling this market.
