In the GBP/CHF pair, you get paid to hold long positions, while the SNB continues to be a presence. Can it turn things around?
GBP/CHF
The British Pound has fallen a little bit again against the Swiss Franc, but with that being said, I think you have a situation where traders continue to fear the wrath of the Swiss National Bank. After all, they have said multiple times that they have no interest whatsoever in a strengthening Franc and they are monitoring the situation.
The Swiss are well known to intervene and therefore I've been watching the Swiss Franc in general. The 1.04 level is an area that I think a lot of people are going to be watching very closely as a potential floor. We did gap below there and then shot straight back up above it. So, the question then becomes whether or not the market has intervened in or if it holds the 1.04 level as a major floor.
LONG-TERM INVESTMENT OUTLOOK
I do think that if we can break above the 1.05 level, then the market has a real argument for a move to the upside as you have the interest rate differential working in your favor and of course if you are patient enough you can get paid over time to hopefully eventually turn things right back around.
With that being the case, I don't have any interest in shorting this pair. I do think it's a nice longer-term setup, although be aware that this is more or less an investment and a lot less a short-term trade. You can see that we are at extreme lows that go back multiple years.
So, if there is a place where we're going to see a bounce, this would be it. This is probably something used to pad your trading account, not something you use to make massive amounts in a short amount of time, but eventually if more risk appetite comes into the market, then in theory this should rise.