- The British Pound has bounced a bit during the early hours on Monday against the Swiss Franc as we have tested the 200 day EMA.
- It does look like it's going to hold. It's probably worth noting that we are now trading above the 1.13 level, so that in and of itself probably captures a bit of attention.
- Therefore, I think it's definitely a market worth watching at the moment.
If we can continue the upward momentum, the 50-day EMA will be targeted near the 1.14 level. And then beyond that, we would be looking at the 1.15 level. Remember, the British pound held against the Swiss franc does create positive swap at the end of the day, and I do think that makes a big difference over the longer term. Because of this, I don't really have any interest in trying to short this market anytime soon. After all, there is a lot of technical support underneath and of course the interest rate payment at the end of the day cannot be overstated as the interest rate differential between the United Kingdom and Switzerland is wide enough to deter those wanting to short this pair for a longer-term move.
Top Regulated Brokers
Watch the 200-Day EMA
But if we did break down below the 200 day EMA, you would have to assume that this pair probably has further the drop. Of particular note will be the 1.11 level, an area that previously had been significant resistance it should now offer support. Nonetheless, the 200 day EMA does seem to be attracting buyers, which is very typical from a longer term standpoint.
Therefore, I do think that we are in the process of trying to stabilize this pair and perhaps send it higher. However, geopolitics, of course, could come into the picture and if people are starting to run towards safety again, that does mean the Swiss franc. So, it's possible that could throw a monkey wrench into things if you are bullish. All things being equal though, it does look like we are at least taking a step in the right direction here when it comes to this pair.
Ready to trade our daily Forex analysis? We’ve made a list of the best forex trading accounts worth trading with.