GBPCHF spikes but fails to close above key level

The graph below shows the excahge rate movement of GBPCHF over the last 7 days.

Pound Swiss Franc has remained rangebound recently but recent key data releases have resulted in spikes.

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As explained in last week’s blog post, GBPCHF has been range bound for some time between 1.4950 and 1.5050. I expressed caution regarding the Euro lands interest rate decision and following speech by Mario Draghi as having the potential to create volatility on the rate and we certainly weren’t disappointed! As the announcement was released that interest rates would be cut in the Euro zone to 0.15%, the CHF strengthened Vs the Pound as investors poured into The Franc for its safe haven status. The rate dipped to 1.4960 testing the key support but this move was only momentary, as Mario Draghi started speaking and discussing the implementation of a negative deposit rate, the CHF then weakened and spiked to 1.5130.

For clients that needed to sell GBP and buy CHF we had limit orders in our system to ensure they captured any potential positive market moves in their favour. As the exchange rate spiked, the orders were filled ensuring clients received the desired rate that wasn’t previously achievable.

So what is next for GBPCHF? If we see another day’s trading where GBPCHF closes above 1.5150 then this will signify a breach of the resistance level and we are likely to witness a period of trading between 1.5150 and 1.5250.

 The Foremost Currency Group is one of the most established currency brokers in the UK and has been providing private and business clients with the most up to date market information and sharpest exchange rates for the last 9 years. For information and access to our exchange rates, please contact me on the details below.

Sam Edmanson – +44 (0) 1442 892060

[email protected]