GBP/CHF Forecast Today 07/8: Downward Pressure (Video)
(MENAFN- Daily Forex)
The British pound has been all over the place. During the trading session on Tuesday, as we continue to at least attempt to recover from the massive sell off that we have seen in the British Pound against the Swiss franc, the Swiss franc has certainly been picking up a lot of strength as of late.
It's not just the pound, it's a general run towards safety currency such as the Swiss franc, the Japanese yen, etc. So, with all of that being said, the downward pressure is still a very real thing, especially considering that we broke above the 1.09 level only to see more selling pressure. At this point, I think we need to keep an eye on the 1.0650 level because that was your floor previously.
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We might be in the process of trying to form a bottoming pattern, but after this type of wipe out, it's really difficult to get aggressively bullish. While the interest rate differential certainly still pays you to hold on to this GBP/CHF pair to the long side. The reality is this is a market that is not to be trifled with Cautious About Risk Appetite
If you take a long position, you need to do so with the knowledge that once it works against you, you need to get out quickly. Furthermore, you need to recognize this is not a market in which you put a huge position on. This is a market that is certainly being influenced by a wide plethora of geopolitical, geo economic, and psychological pressures that are beyond the scope of both Great Britain and Switzerland.
It is a byproduct of the palpable fear that we see in the financial markets at the moment. The massive sell off, of course, broke through a major trend line. The 200 day EMA and of course, smashed through the 61.8% Fibonacci retracement level, which is generally a sign that the trend is completely broken for good. But that's just an observation I've made over the years. All things being equal, I think we're in a holding period.
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