- I see that the GBP/CHF market is likely to continue to go higher, as we continue to threaten the crucial 1.15 CHF level.
- The 1.15 CHF level is an area that we have seen a lot of action at previously, and if we can finally break above here, then it could open up a significant amount of upward pressure.
- After all, we have seen the market fight this area multiple times, but another thing that you need to pay close attention to is the fact that the market has been so resilient in this area.
I do believe this is a positive turn of events overall, and with this being the case, it’s probably only a matter of time before we break out. If we do break out at this point, then I believe that the target is probably going to be the 1.1650 level above, which is an area that is a major swing high. Break above that allows the British pound to truly take off at that juncture.
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Risk appetite
Keep in mind that this is a currency pair that is heavily depended on risk appetite, meaning that the British pound is considered to be a riskier asset than the Swiss franc, which of course is a major safety currency. As long as there is a significant amount of risk appetite out there, then you have a situation where this market could rally. However, if the market were to turn around and fall from here, it’s likely that we would see a lot of selling pressure down to the 50-Day EMA. This of course is an indicator that a lot of people will be watching, and therefore I think it could be an area where you would see quite a bit of a reaction.
Either way, I think this is a market that will remain very volatile, but you also have to keep in mind that there is a major interest rate differential between the 2 currencies, and as long as that’s the reality, it makes sense that you hold the British pound over the Swiss franc anyway. I believe that eventually we do break out.
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