The GBP/CHF pair initially pulled back during the Friday session, but as you can see bounced back significantly in order to form a hammer. This hammer suggests that the pair is ready to continue higher, and this makes complete sense as the British pound continues to show strength overall, perhaps as a reconsideration of the British economy on the whole as it has avoided a “triple dip recession.” This of course is bullish – or at least not as bearish as we thought it was going to be. That’s a subtle, yet important distinction as the markets are measuring relative performance, which of course brings me to the Franc.
The Swiss are trying to keep the value of the Franc down overall, but the market is finally starting to do the work of the Swiss National Bank for it. The Swiss have to be relieved, as they have been selling Francs in several pairs for a couple of years now. It is possible that the SNB won’t actually bankrupt the country just yet at this rate. (The SNB bought a lot of Pounds as well as Euros a little while back.)
The pair has a tendency to be a barometer of risk appetite in general, so the fact that it reacted so strongly on Friday shouldn’t have been a surprise, as the Non-Farm Payroll number in the USA was so strong, as well as the revisions form the month of March.
The 1.50 level looks like the target that the pair is trying to target going forward. The market has a way to go, but remember this this pair can really fly when things get going. Also, it should be remembered that the Dow Jones and S&P 500 both made all-time highs during the session on Friday, which of course shows just how much risk appetite remains strong. With this being the case, it’s hard to imagine that the “riskier” currency pairs like this one won’t continue to grind away to the upside. In fact, I think that there is quite a bit of bullishness left in this pair – beyond even the aforementioned 1.50 level eventually.