Forex Watchlist: GBP/CHF Long-Term Range Support

It looks like GBP/CHF is bouncing off that long-term floor visible on the pair’s weekly time frame, but I’m worried how it might react to the BOE statement. Take a look at this neat bounce, though!

GBP/CHF Weekly Forex Chart

GBP/CHF Weekly Forex Chart

The pair seems to have bottomed out at the 1.2700 major psychological level, thanks to SNB intervention and the pound’s stellar rallies these days. The U.K. seems to be making a bit of progress in reducing political uncertainty, as David Cameron is set to turn over his Prime Minister post to Theresa May this week. And even though May voted to stay in the EU, she reiterated that she plans to make a success out of the Brexit, restoring optimism in the markets.

Because of that, sterling has been gaining across the board and might continue to do so when the new leadership steps in. However, market participants are also bracing themselves for an additional round of easing or interest rate cuts from the BOE this week, possibly forcing the pound to retreat. So while I’m thinking that the SNB could keep defending the floor on GBP/CHF, I guess I’ll have to be patient in waiting for a better entry level after the actual BOE statement.

I’ll keep y’all posted on my trade entries through my Twitter account. As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups!

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  • forzion

    I think too that it is much better to wait until super thursday ends. There is still too much risk for GBP weakness. I have not tested my new strategy at this pair yet but in other pairs I see from my possible profit targets scenarios with very weak pound. I do not say, that this is going to happen, I only say it could happen. We can see another -10% from pounds value. And this makes me cautious.

    And I think that for SNB is the rate of EUR/CHF the most important so if they can hold this there is possibility that they let the GBP/CHF fall lower if the GBP weakens dramatically that EUR.

    • Cyclopip

      Fair points. I’ll be ready to short this one if it does break below that long-term floor anyway, but it will be interesting to see a bounce on a buy-the-rumor-sell-the-news situation or if the BOE stands pat for now. But I do hear what you’re saying, fundamentals suggest that there are stronger odds for pound weakness, probably just a matter of time or the right catalyst.

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