The GBP/CHF pair went back and forth during the session on Friday, the markets testing the 1.45 level. The market certainly sees a lot of support in this general vicinity, and the fact that we formed a bit of a hammer certainly shows just how supportive this area could be. After all, we had seen a couple of shooting stars in this general vicinity back during the month of August, and now that we have broken through it and have come back, we should see buyers step back into support this market in a massive kind of way.
The British pound is doing fairly well in general, as the Swiss franc seems to be strengthening as well against the US dollar. That being the case though, I feel that this market is more than likely going to go much higher, probably the 1.47 level and beyond.
Continued bullishness out of London
With the Bank of England coming up with a rate decision in the next couple of days, it's very likely that there will be a lot of volatility surrounding the British pound this week. However, it seems very unlikely that the Bank of England will be able to add anything to monetary policy going forward. That being the case, the British pound should continue to strengthen over time, and because of that I feel that this market has already given a bit of a "green light" regarding whether or not to go forward.
I do see quite a bit of support underneath the 1.45 level, so even if we broke down a bit I believe that there is a ton of support all the way down to the 1.43 handle. Any type of supportive candle between here and there is a buy signal as well, and it isn't until we get below the 1.43 level that I would even consider selling this pair. I like this pair typically, because it is volatile, but it also likes to trend in one direction for quite a bit of time. That being the case, I feel that this could be a nice trade to the upside.
