(MENAFN- Daily Forex)

• I expect the British pound to remain under pressure against the Swiss franc despite a short-term rebound from the 1.05 level.
• Selling opportunities may emerge near 1.0650, with broader downtrend risks persisting amid Bank of England rate-cut expectations.

The British pound initially fell a bit during the trading session here on Wednesday to test the 1.05 level, an area that has been important as of late. The market turning around the way it has suggests that we could send the market back up to the 1.0650 area, where I anticipate seeing a lot of selling pressure. The area right around the 1.0650 level is an area that previously had been support, so I do think there is a certain amount of market memory coming into the picture to cause chaos.

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If we can break above the 1.0650 level, then the market could go looking to the 1.07 level. It's really not until we break above that level that I would be overly excited about buying the British pound because this has been a brutal downtrend, and we see the British pound failing against most other currencies. The other side of that coin, of course, is the fact that the Swiss National Bank has suggested that they could very well intervene in the markets if they don't settle down, because the Swiss franc, in their words at least, doesn't reflect fundamentals.

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And keep in mind that the British pound exchange rate against the Swiss franc is not the first thing that the Swiss National Bank pays attention to. It's actually the euro against the Swiss franc, but it does have a little bit of a knock-on effect. If we do rally at this point, I think signs of hesitation are what we look for to start selling again. If we do break out to the upside, then the market would be one that you can hang on to in order to collect the swap.

But there are a lot of bets out there that the Bank of England may have to cut rates, so we'll see how that plays out. I think ultimately, we do turn around, but there is a lot of noise in the next several weeks just waiting to happen here.

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