Early March, the GBP/CHF pair reached 1.2857 which was the lowest level since November. Since then, the pair has been on an upward momentum, with no signs of stopping. It is now trading at the highest level since June 2016. The question among traders is on whether the pair could continue rising or whether a short-term correction could be around the corner.
The pair’s rise mostly comes from the lack of major news from the Switzerland side and the deluge of news coming from the United Kingdom. In recent months, the UK economy has shown significant resiliency even with the challenging situation with Brexit. The unemployment rate has remained stable while the manufacturing and services sector have also been good.
In addition, the Bank of England officials, including Governor Mark Carney have increasingly become hawkish. This has come as the country’s rate of inflation has remained above the 2% targeted by the BOE. In the March meeting, the officials remained confident that the economy will be good, even with the challenges of Brexit.
If you are long the pair, you have certainly made a good profit. As such, you should pay close attention to a likely correction as bullish traders exit their positions. The key point to watch as the pair finds resistance is 1.3490, which is the pair’s 23.6% Fibonacci Retracement level.