This all sounds great, but it must pass through parliament first and implied volatility isn’t suggesting it will be a pleasant session. In fact, implied volatility for GBP/CHF is pricing in a 1.8% move over the next 24 hours, in either direction, which is essentially a 3-standard deviation day. So it’s also worth remembering that higher volatility doesn’t always lead to a clean, directional break and can instead invoke whipsawed price action.
Still, if we can ride out the noise, and key levels hold then GBP/CHF is one to watch from a technical standpoint. Among GBP crosses, GBP/CHF is the strongest performer year-to date as it continues to develop its developing bullish structure. Two prominent, higher lows have formed since January’s flash-crash and the move is bobbing nicely along the 20-day eMA. Furthermore, yesterday’s bullish engulfing candle has respected the neckline from February’s breakout to carved out a prominent low.
It could be argued that the 1.3062 low could mark a clear line in the sane for bulls and bears following the vote. If the key level remains unchallenged, GBP/CHF shows potential to extend it bullish trend and head towards the 1.38 highs. The key here though is to wait for prices to consolidate above key support levels to avoid jumping into an extended move. However, a break beneath 1.3062 invalidates both the structural low and neckline support and takes it back within range.