- The British pound has been rather negative against the Swiss franc during the trading session on Tuesday, to break below the 1.14 level at one point during the day.
- Ultimately, this is a pair that is tightly related to what the risk appetite is around the world, and as risk appetite has taken a bit of a beating, it makes sense that traders are running to the Swiss franc for safety.
- After all, the Swiss franc is considered to be one of the ultimate “safety currencies” in the world.
This isn’t necessarily in an indictment on the British pound, it just shows how much fear there is out there as traders are willing to put money to work in Switzerland in low yielding currencies. After all, the Bank of Switzerland has an interest rate decision this week, widely anticipated to be a cut of 25 basis points. In other words, the interest rate differential is going to get expensive to be short in this currency pair. The technical analysis is a completely different story as well.
Top Forex Brokers
Technical Analysis After Break Out
During the trading session on Tuesday, things have been ugly but I’m paying close attention to the 50 Day EMA, currently at the 1.1340 level, an area that has been important support previously, and the indicator itself has acted as a bit of a trend line. The size of the candlestick is rather ugly, but that doesn’t necessarily mean that it’s the end of the world. However, I would point out that we’ve had to rather large ugly negative candlesticks above the 1.14 level, so it’ll be interesting to see if we can turn things around again.
We had recently broken out of a 300 point consolidation range between the 1.11 level on the bottom, and the 1.14 level in the top. The so-called “measured move” signifies that the British pound should be trading at 1.17 CHF, but right now it doesn’t look like we have the momentum. Furthermore, it’s just a suggestion of where we could end up. I do like the idea of buying dips here, at the first signs of a bounce.
Ready to trade our daily forex forecast? Here are the best online trading platforms in Switzerland to choose from.