During the course of the session on Monday, the GBP/CHF pair initially tried to fall, but found enough support at the 1.45 level to turn things around and form a bit of a hammer. The hammer of course is a bullish sign, and therefore I think that buyers will be interested in this market. On top of that, we have the GBP growing in general, so with that being the case I suspect that this pair will simply go right along with the rest of the British pound related pairs. I like the 1.45 level for support, and as a result it makes sense to see buyers enter the market in this area. The pair has been in a nice uptrend for some time, and we even had a few very impulsive candles over the last couple of weeks.
200 days exponential moving average
The 200 day exponential moving average was recently supportive as we rallied to break above the 1.45 handle. However, this area now looks as if it is offering enough support to continue to go higher. At this point in time, I think that short-term pullbacks will be buying opportunities, just as a break to a fresh, new low. This is a market that could very well go to the 1.48 level, and then go to the 1.50 level after that. I think pullbacks will continue to be looked at as potential value, and as a result we would continue to find more and more strength on these pullbacks.
It is not until we are able to break down below the 200 day exponential moving average that I would be willing to sell this pair. I think that volatility could return obviously, because the pair tends to be volatile in general and of course is very sensitive to risk appetite. At this point in time though, it appears of the Swiss franc is continuing to struggle overall so I believe that we continue higher.
