GBP/CHF Show Signs of Exhaustion on Thursday
The GBP/CHF pair initially rallied during the course of the day and extended its move above the 1.55 level on Thursday, but turned around to form a bit of a shooting star. The shooting star of course suggests that we are going to pull back from here and perhaps fall as the area has offered a bit too much resistance. The breakdown below the bottom of the shooting star is a selling opportunity for short-term traders, but ultimately I believe that we do go higher. For myself, I will be selling, but I know that some of you short-term traders will more than likely try it. I think there is profit in that, but ultimately I feel it is much easier to buy a supportive candle below, somewhere near the 1.5350 level, as it was resistive in the past.
Pullbacks Offer Value
I believe the pullbacks continue to offer value, even though the British pound is fairly soft. This is an indictment on the Swiss National Bank and its monetary policies. After all, it’s working against the value the Swiss franc, and of course the Swiss have the misfortune of being stuck in the middle of the European Union. The Swiss send 85% of their exports into the EU, so having said that it makes sense that the Swiss economy will suffer right along with the European economy.
On the other hand, if we break above the top of the shooting star for the Thursday session, the market could go much higher, perhaps reaching towards the 1.58 level next, followed by the 1.60 level. With this, you will be interesting see what the next move is, but regardless I believe it ends up being a buying opportunity one way or the other, as the support below will be so strong after the massive and impulsive move higher, and of course breaking the top of the shooting star is such a bullish sign.
