During the session on Monday, we ended up pulling back in the GBP/CHF pair. With this, it looks like we are bit overextended but as you can see on this chart I have marked a yellow rectangle where I anticipate seeing quite a bit of support. This is essentially the 1.5350 level, so somewhere near that area I would be more than willing to start buying supportive candles. The British pound struggled in general during the session, so it’s not a huge surprise to see this move.
Ultimately, you have to keep in mind that the 1.55 level above is a large, round, psychologically significant number, and of course a lot of interest will be shown at that area. The fact that we pullback from there just shows a simple pullback in an otherwise strong uptrend.
Swiss National Bank
The Swiss National Bank has been working against the value the Swiss franc in general, and as a result it has been losing value. On top of that, you have to keep in mind that the European Union has been struggling overall, and with that it will continue to work against the Swiss economy. The Swiss send 85% of their exports into the European Union, so it makes sense that the currency itself will fall in value. On the other hand, we do have the British pound which is quite a bit stronger in the big scheme of things.
However, during the session on Monday, the British pound fell against most currencies, so the translation into this market doesn’t really surprise me. Given a supportive candle just below, I would be a buyer yet again, as we should reach towards the 1.55 handle. Eventually, we will break out to the upside and continue to go much higher and that will be more or less a “buy-and-hold” type of situation. This is a market that is simply trying to find more buyers to continue the uptrend.
