• The British pound rallied in the early hours of Wednesday trading to reach the 1.07 level.
• However, we have given those gains back and we now find ourselves near the 1.0650 level again, forming an inverted hammer.
• When you look at the longer term chart, you can see just how important the area between 1.0650 and 1.06 is as far as support is concerned.
• Therefore I'm at least willing to take a flyer on this, recognizing that odds are somewhat against me in this current environment, but I do recognize that the risk of reward certainly lines up quite nicely.
   

If We Break Lower, Look Out.

This is because anything below the 1.06 level has the high likelihood of seeing a significant breakdown. Do I think this is the end of the downtrend? No, not at all. But I do think that we are trying to find some type of bottom. And this could be a triple bottom. We'll just have to wait and see. If we were to break above the 50-day EMA currently at the 1.0763 level, then maybe you can start to talk about a deeper and much more long lasting recovery. You do get paid to hang on to this pair.
 

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I think ultimately that could be the saving grace of the British pound against the Swiss franc. But at this point in time, it's obvious that we just don't have a lot of upward trajectory. I think we're just bumping along the bottom here, trying to find a reason to get bullish.
 

Sooner or later, something will come along and that might be more of a risk on type of headline that people go running into this pair to take advantage of. After all, nobody likes paying swap at the end of every day for a longer term trade. This is a very clear situation of risk appetite getting eviscerated out there.

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