The GBP/CHF pair fell during the session on Tuesday, but bounced off of the 1.45 level yet again. This level has been significant support, as well as significant resistance in the past. Because of this, I feel that this market will continue to be attracted to this level and it is in a sense of the word what could be thought of as "equilibrium." Because of this, I feel that the markets will continue to hover around this area, but I believe there is a nice short-term trading opportunity forming right now.
The Swiss franc of course is a safety currency, and there is a bit of concern about global growth at the moment. However, the British pound isn't going to poorly itself, so I feel that this market will fall apart too far. In fact, I believe that we are finding a nice trading range between the 1.45 level on the bottom, and the 1.46 level on the top. Because of this, I believe this is a nice short-term traders market.
Upward bias
Based upon what the British pound is doing against the US dollar, I do have a bit of an upward bias on it. That being the case, it would not surprise me at all to see is bounce from here and finally break above the 1.46 level. That being said, I believe 1.47 will offer resistance as well, and it won't exactly be the smoothest ride. Eventually though, I believe that this market will try to go to the 1.50 handle before it's all said and done. While it does some kind of high, it has been there before. In fact, there was a point time where that would then considered a low level.
If we do fall below the 1.45 level, I see a ton of support down the 1.43, and that's probably where we would head to. Down there, you could start looking for supportive candles again, but I have to admit I have a hard time believing we are going to break down below the 1.45 handle, especially of the British pound can breakout above the recent resistance against US dollar, which is sitting just under right now as I type this.
