- The British pound initially fell against the Swiss Franc to show signs of negativity, but we have turned right back around to show signs of life again.
- When you look at the chart, it's obvious that we are starting to recover from a massive drop towards the 50-day EMA, and now it looks like we are recovering as traders are starting to focus on the idea of interest rate differential again.
- Above we have the 1.15 level, which could be a little bit of a resistance barrier, but ultimately, I think this is a market that will continue to climb and even get above there.
After all, the British pound offers much more in the way of interest than the Swiss Franc, and it's worth noting that the Swiss National Bank recently cut rates. They were in fact the first of the major economies to do so. I think that any short-term pullback at this point in time ends up being a buying opportunity, and I do think that given enough time, we not only break the 1.15 level, but perhaps even reach the swing high again. Even if we were to fall from here, I think there's plenty of support near the 1.13 level, not only due to previous action, but the fact that we also have the 200-day EMA sitting just below there.
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Central Banks Differ in Their Fight
The Bank of England continues to fight inflation, while the Swiss National Bank has to worry about the effects of the European Union crumbling around them. So, I think this makes a lot of sense to be a market that you are a buyer of. In fact, I'm looking to add as soon as possible, and perhaps trying to take advantage of what could be a longer-term swing to the upside. Remember that this GBP/CHF pair is very volatile, but ultimately it does tend to trend for long periods. Because of this, I love the idea that I can hold onto this market, and get paid at the end of every session.
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