GBP/CHF fell for much of the session on Wednesday as the British pound in general lost against many of the world currencies. However, as we approach the 1.51 handle we start looking at significant support going down to the 1.50 area.
This area is significant from a longer-term perspective as well, and as such we like the idea of going long on a break of the highs from the Wednesday session. After all, that hammer suggests that we will see some type of bullish momentum going forward. If we can get going, we think that a retest of the 1.55 level is certainly possible. We also see support all the way down to the 1.50 level, so certainly wouldn't sell until we were well under that on a daily close.
The Bank of England currently is sitting still as far as its monetary policy is concerned, and the Swiss National Bank is on the other end of the spectrum as it is trying to find creative ways to devalue the Swiss franc. With the value of the Franc gaining recently, one has to think that the SNB is not happy.
British pound one of the strongest currencies
Recently, we have seen the British pound strengthened against most world currencies. The Swiss franc of course hasn't been any different and it has been helped along by the fact that the Swiss National Bank has been a buyer of this currency pair. They have openly admitted that they are diversifying into British pound, and this of course has provided some support in this market.
Also, you have to keep in mind that a lot of money is running away from Switzerland and the European Union at the moment. The most logical place they would go to is the United Kingdom as it is not only close, but the rates aren't in jeopardy. This of course makes sense for big money to flow into the United Kingdom. As long as the bond rates are going to be relatively elevated against its neighbors, I suspect that the Pound should continue to strengthen.