We had avocated a stand down on this pair until a clearer dynamic emerged from the new environment in which all CHF pairs find themselves. After yesterday’s announcements from the BOE as well as ECB the pair went up to new highs at 1.3980 and like we had said earlier on, this could very well be the start of a large move to the upside.
Such a move though would be of doubtful legitimacy given the situation in the UK where the government is going through the pains of one of the biggest cuts in spending while the local economy is sluggish and far from full recovery. That said, though room does exist for moves to the upside, such moves would lack a clear fundamental driver and probably be short lived, especially should the BOE turn around and decide to take the accommodative route.
