The GBPCHF pair has suffered heavily in recent days after Boris Johnson’s threat to walk away from Brexit talks. The price has bounced in the last two days but further losses could be ahead.
Johnson’s controversial Brexit bill has passed the first Parliamentary hurdle with a vote of 340 to 263. Ministers say the bill contains safeguards to protect Northern Ireland and the UK, if negotiations break down. But critics, including some Conservatives and former Prime Ministers, warned it risks damaging the UK’s reputation by breaching international law.
Today saw weaker unemployment figures from the UK. According to the ONS, the country’s average earnings fell by 1.0% in July. That was better than the expected 1.3% decline. It was also better than last month’s decline of 1.2%. Claimant counts in July rose by more than 73.3K, which was also better than analyst forecasts but the picture doesn’t show a healthy economy and analysts expect that the rate will jump in October when the furlough program ends. The program will likely be extended into the year-end if cases continue.
The picture for the Swiss Franc will be boosted by the safe haven status. Not only do we have the Brexit No-Deal threat but we also have the risk of increased virus cases as the U.K. flu season takes hold. This should make the Swiss Franc a good risk/reward play.
GBPCHF Technical Outlook
The sell-off in the GBPCHF has been heavy as pound weakness collides with CHF safe haven status. The two-day bounce has been weak and will likely see further losses ahead. The March lows at 1.1200 are in play and the move below 1.16500. Investing Cube offers one-to-one virtual Trading Coaching for those who wish to sharpen their trading skills. More details are available here.
GBPCHF Daily Chart