GBP/CHF Forecast Today 06/8: Pound Hits New Low! (Video)
(MENAFN- Daily Forex)
The British Pound has fallen apart against the Swiss Franc yet again during the trading session on Monday, as we had plunged below the 1.08 level. All things being equal, we had broken below the 61.8% Fibonacci retracement level, which generally means that we will at least make some type of an attempt at a complete round trip.
That could send this pair down to the 1.0650 level. That's an area that has been significant support and therefore it would make a certain amount of sense to be a target. Regardless, this is a situation where the
market had fallen far too quickly to try to chase it here. And a little bit of a dead cat balance could be in the works. After all, sooner or later those who had shorted this market would be willing to take a profit and right now would be a really good time to do it.
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That being said, it's very difficult to imagine that a sell-off like this is a one-off. I do think that there will be a recovery, but that recovery will be a bit of a bull trap because markets don't sell off like this without some type of serious damage. There would need to be a fundamental reason for the markets to change, so we will have to wait and see if that happens. Some of those could include central bank actions or perhaps the Federal Reserve trying to pick up risk appetite and that could help this pair but at this point it just doesn't look like a market that has much hope of rallying significantly. Any rally at this point in time I would look for signs of exhaustion that I could start shorting.
In general, this is a pair that is also going to have to pay close attention to global risk appetite, which seems to be fading rather quickly. Are we heading into something even nastier? We should know soon, but there is a lot of fear out there.
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