GBP/CHF - The Pair to Short-Term Range Trade

The GBPCHF has traded within a fairly large range through the medium term, and nearby resistance offers solid risk-reward on a medium term play. Clearly, a stop of 170 pips requires a minimal position size to avoid catastrophic losses.


Trading Tip - The GBPCHF has traded within a fairly large range through the medium term, and nearby resistance offers solid risk-reward on a medium term play. Clearly, a stop of 170 pips requires a minimal position size to avoid catastrophic losses. Yet reward is eyed a significant 300+ pips lower. Given a 2:1 stop to limit ratio, we feel fairly comfortable holding this trade as long as it remains the key 61.8% Fibonacci retracement of 2.4966-2.3761 at 2.4502.
Event Risk Switzerland and the UK
UK - Event risk in the UK will be mild over the next few days, and the Nationwide surveys of consumer confidence could fall back for the month of August, as volatile financial markets and the risk of tighter monetary policy may be cause for concern. The Bank of England?s rate decision will be the big draw, however, the central bank is highly unlikely and is not expected to adjust monetary policy as inflation remains below their 2 percent target.
Switzerland - While Swiss economic data tends to only have a short-term effect on the national currency, it will be worth looking at the SVME PMI and GDP releases, as they may be of importance to the SNB when they meet on September 13th. SVME PMI is anticipated to ease back slightly, but with estimates at a robust 61.5, it is clear that the Swiss economy remains one of the healthiest and most stable in the developed world. The second reading of Q2 GDP should echo this statement, with expansion anticipated to show a brisk 2.4 percent annualized pace - up from 2.2 percent in the first quarter.

Data for September 2 - September 7 Data for September 2 - September 7
Date UK Economic Data Date Swiss Economic Data

Sep 4 Nationwide Consumer Confidence (AUG) Sep 3 SVME PMI (AUG)
Sep 6 BOE Announces Interest Rates Sep 4 GDP (2Q P)
Sep 6 Unemployment Rate (AUG)

Written by David Rodriguez and Terri Belkas, Currency Analysts of DailyFX.com