- The British pound fell pretty significantly during the trading session on Thursday, only to turn around and bounce from the crucial 1.07 level.
- By doing so, this shows that there is a certain amount of resilience in this pair, and I do watch this pair quite closely, due to the fact that it is a great barometer of risk appetite, as the Swiss franc is considered to be one of the “safest currencies” in the world, so if traders are starting to get a bit concerned, they will often pile into it.
Technical Analysis
The technical analysis of this pair is a bit interesting at the moment, because if you look at the longer-term chart, it’s obvious that we are in a downtrend. However, we have also seen quite a bit of stability near the 1.07 level more than one time, as we are now in the middle of our 3rd attempt to test it for support. So far, it has held so if you are looking for some type of value in this pair, I cannot think of a better place to expect to see it. Ultimately, if we were to break down below the 1.0650 level, then the British pound will probably plunge against the Swiss franc, and I do believe at that point in time you would probably see the Swiss franc strengthening against multiple currencies.
However, if we can break above the 50 Day EMA at the 10777 level, then we will challenge the 1.08 level. Anything above the 1.08 level would be a very bullish sign, perhaps opening up the possibility of a move to the 200 Day EMA, just below the 1.10 level.
This also could determine that we are in the midst of a trend change, but trend changes are almost always very noisy and difficult to hang onto.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
