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!
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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