GBP/CHF
Yesterday was a dramatic day for the Euro after the ECB simultaneously announced the end of their QE programme while also presenting that in a dovish tone stating that rates would not be hiked until summer 2019. See Justin's report on it here which sums it up nicely. So, as the market digests that shift here is a longer term chart that is worth considering. It is the GBP/CHF weekly chart.
The GBP has been pressured for some time now upon Brexit concerns and any good news regarding Brexit is likely to have a positive effect on the GBP. The risk is for the upside. Last month, in May, the BOE delayed expectations of a rate hike, which was a disappointment. However, expectations now turn to the BOE's next rate meeting in August as possible timing for a rate increase. What is clear is that a rate cut is not likely , at this stage, for the BOE. It is a hike or hold situation.
The CHF by contrast is still in a negative rate environment and it's policy of intervening in a strengthening CHF means that it is hard to see the CHF keep appreciating against the GBP. The path of least resistance for the GBP/CHF is up.
On the weekly chart there is a pullback from it's last leg higher which offers excellent value for an entry. Price has currently stalled at the 100DMA level (blue line) which also corresponds to the 61.8% fib level of the last up move. An entry here with a stop at 1.2850 offers excellent value with plenty of topside in play.
