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Will British Pound Rally Continue Against the Swiss Franc?

Currencies / British Pound Dec 06, 2013 - 06:47 AM GMT

By: FXAcademy

Currencies

Adam Lemon writes: The GBP/CHF pair had a very back and forth session during the trading hours on Wednesday, but the most important thing is the fact that there is an uptrend line dissecting through the 1.4750 handle, and that area of course has been one of the least passing interest. Because of that, it makes perfect sense it bounced from there, and now have a somewhat neutral looking candle. However, all things being equal, it looks like the British pound is set to continue its strength against the Swiss franc. Lately, the British pound has been one of the strongest currencies to follow.


The great thing about this pair is that it has a reasonable spread, and it tends to follow global risk appetite. Traditionally, the Swiss franc has been a safe haven of sorts, as money flows into Switzerland when there is a certain amount of fear or uncertainty. It wasn't until recently that the Swiss franc was taken off of the gold standard, so that's probably part of the reason. On top of that, there is of course the whole safety of Switzerland itself, and the Swiss banking sector. On the other hand, the UK is a little bit more of a riskier place. These are relative terms of course, but this is how the pair typically moves.

The British pound reigns supreme.

The British pound has been one of the strongest currencies but it has had to take a little bit of a break recently. Nonetheless, there might be a little bit of a tight range going higher along the trend line in the near-term. Doesn't matter though, ultimately the uptrend is still intact, and  should continue to see buying every time this pair falls a bit.

Even if we do see the trend line gets broken to the downside, there are plenty of supportive areas below in order to pick this market up. Because of this, trader should be very bullish of this pair, and will continue to be for the foreseeable future.

By Adam Lemon, Senior Analyst, DailyForex.com and Chief Instructor at www.fxacademy.com.

About FX Academy
FX Academy is a comprehensive Forex education system conceived directly from the need for traders to learn about Forex trading at their own pace in a comfortable, interactive environment. Founded by the trading experts at DailyForex.com, FX Academy offers traders of all levels the widest range of online courses to increase their knowledge of macro environmental trading conditions, trading concepts and strategies from core to advanced, heighten confidence and ability to trade profitably. For full details visit: http://www.fxacademy.com/

About Adam Lemon
Adam is the Chief Instructor at www.fxacademy.com and trades Forex on his own account. He has worked in financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.


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