The GBP/CHF pair is a very risk sensitive currency pair. Is because of this that I watch this pair quite often, and the fact that we have been falling for some time is not much of a surprise. Again, we find ourselves at significant lows, in the form of the 1.2440 handle. By the end of the day on Tuesday, we bounced enough to form a bit of a hammer and therefore it looks as if a bounce is possible. However, I feel that if we can break down below the bottom of this candle that would be an excellent selling signal as it is not only continues the longer-term downtrend, but it also shows a significant break of support. These are the type of trades to look for.
However, we could have a bit of a bounce and I think that bounce could be all the way up to the 1.27 level as we may be a bit “oversold” in the British pound in general. Having said that, I still think that a rally only begs to be sold in the end, so a rally that show signs of exhaustion is also reason enough to start selling this pair. You could buy on a break above the top of the candle for the day on Tuesday, but quite frankly I think that’s a dangerous trade. This is a market that seems to be pretty negative overall, and as a result that’s what I’m looking for selling opportunities over and over, although I recognize we may have to work on the short-term charts in order to be profitable at this point in time as we should continue to get quite volatile movements, especially with the Prime Minister of Great Britain giving a press conference during the day today. Ultimately, the” article 50” will be triggered, and that should continue to punish the British pound at least for the short-term.
