GBP/CHF Forecast: British Pound Continues to Find Support Against Swiss Franc

• The British pound has gone back and forth during the trading session on Monday, as we continue to find support against the Swiss franc.
• This does make a certain amount of sense, considering that the Swiss National Bank has recently cut rates, and it looks like they very well could again.

All things taken into account, you can also point toward the European Union and its sudden shift in politics when it comes to the EU parliament, and although it’s not a direct reflection on Switzerland, the Swiss economy simply is far too dependent on your to decouple the two economies.

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Strong Support

There seems to be strong support underneath anyway, so this is a market that I think will eventually find plenty of buyers. If we can break above the 50-Day EMA, then the market is likely to go looking to the 1.15 CHF level, an area that has been important more than once. Because of this, I think you’ve got a situation where short-term dips continue to get bought into, as it offers value in a market that is obviously strong.

Interest rate differential continues to favor the British pound, and I think it will for some time now. With that in mind, I don’t have any interest in trying to short this market, because quite frankly you would be “swimming upstream.” Ultimately, this is a market that certainly has a lot of inflows and will continue to see those inflows from everything I see. The Swiss franc of course is considered to be a safety currency, so people will pay attention to it, at least in times of concern. However, I think you have to look at this as a market that has already made up its mind from a longer-term standpoint that we probably won’t go much lower. With that, I am bullish and will remain so for the foreseeable future, but I do recognize that the occasional pullback will cause a few headaches along the way. However, as you get paid to hang onto the pair, it helps traders hang on to a position.

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