- The British pound has fallen a bit against the Swiss franc during trading here on Tuesday, which is not a huge surprise considering we are getting headlines that maybe the Americans are going to get involved with this Iranian conflict.
- That has people looking for safety and the Swiss franc is considered to be a safety currency.
And while the British pound isn’t exactly risky currency, it definitely does not invoke a run to safety like the Swiss economy and the Swiss banking system will. So, with that being said, we’re going to have to watch the bottom of the candlestick from the Friday session to see if we can, in fact, stay above there if we can then we have a real possibility of abouts.
But if we were to break down below the 1.09 level, that could have traders just shorting this aggressively, that could open about move all the way down to the 1.06 level, although there’s a lot of real estate to cover to get there. The market turning around at this point and breaking above the 1.1060 level opens up the possibility of a move to the 50 day EMA near the 1.11 level, and then possibly even beyond that. Ultimately, this is a scenario where we are probably going to be on edge. And I do think that favors a short term move in the Swiss franc.
Headlines Will Continue to Be Important
I don’t know what to say other than headlines will continue to drive this. So, we could get peaceful overtures that will turn this thing right back around, or we could get even more drastic comments coming out of the White House or other leaders that could send this plunging. Caution is a better part of valor here.
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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.
