Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Chart Of The Day: GBP/CHF Looks Set For A Big Breakout 

By Fawad RazaqzadaForexJan 22, 2021 09:39AM ET
www.investing.com/analysis/chart-of-the-day-gbpchf-looks-set-for-a-big-breakout-200556738
Chart Of The Day: GBP/CHF Looks Set For A Big Breakout 
By Fawad Razaqzada   |  Jan 22, 2021 09:39AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

This article was written exclusively for Investing.com

It is very difficult to be bullish on the pound during times like now, with COVID deaths hitting new records every day and the economy being on the brink amid ongoing lockdowns. Indeed, the pound sold off this morning on renewed concerns about a full UK border closure, which was being 'considered' by the government, according to Environment Secretary, George Eustice. This is due to concerns about new COVID variants being imported from abroad. 

However, despite today’s weakness, I am quite bullish on the pound. 

A no-deal Brexit has been avoided and with the UK being ahead of many countries in rolling out the COVID vaccines, the economy could re-open quicker and growth could rebound as confidence slowly returns. This might not happen until at least the start of Q2, but as markets are forward-looking, the latest dip in the pound could be bought. 

Among the pound crosses, the GBP/CHF is the one that I think might do well in the weeks and months ahead because demand for the haven Swiss franc is likely to drop as confidence returns. What’s more, the Swiss National Bank is always ready to step in and devalue the franc, with the currency becoming uncomfortably strong during this pandemic. 

So, GBP/CHF was clearly not looking exactly bullish at the time of writing, but due to the above reasons it is one to watch in the days and weeks ahead. I reckon it could be poised for a big breakout soon; we just have to wait for the bullish trigger. 

The longer-term picture is starting to show a few promising signs with the weekly chart forming higher highs and higher lows:

GBP/CHF Weekly
GBP/CHF Weekly

On the daily time frame, you can see that I have marked out today’s high at 1.2160 as the trigger level that might lead to the breakout:

GBP/CHF Daily
GBP/CHF Daily

The reason I have chosen this level is because on the day before, GBP/CHF had formed a bearish-looking inverted hammer-like candle and there was some downside follow-through when the low of that candle broke today. Thus, if in the coming trading days, GBP/CHF goes back above the low of Thursday’s range and goes on to take out today’s high, this would clearly tell us that the sellers are trapped. As a result, price may then stage a short-covering rally that could take rates above the key resistance in the 1.2200 area, leading to further technical buying. 

So, a move above 1.2160 is one of the ways to potentially get on board on the long side. Another way is to wait for the formation of bullish price action on the lower time frames, ideally above the 1.2000-1.2050 key support range. 

Chart Of The Day: GBP/CHF Looks Set For A Big Breakout 
 

Related Articles

Chart Of The Day: GBP/CHF Looks Set For A Big Breakout 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Leeroy Mubaiwa
Leeroy Mubaiwa Jan 22, 2021 7:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I am quite impressed by stock exchange market but I don't know how to progress
Lloyd Bastien
Lloyd Bastien Jan 22, 2021 7:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
My team have a informational tonight at 730 let me know if you free ill save you a spot would love to show someone with ambition the secrets
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email