Potential signal:

• I am a buyer of this pair anywhere near the 1.15 CHF level.
• I would have a stop loss at the 1.1385 level, and a target of 1.1650 above.
• It's easy to see that we've had quite a bit of a recovery from a gap lower to kick off the trading session.
• Ultimately, this is a pair that's highly sensitive to risk appetite, and therefore you are going to have to pay attention to what's going on here.

And I think that the 1.1650 level is offering a bit of resistance. The market has been extended, and at this point in time, I don't have any interest whatsoever in trying to get to crude here. I think what we're looking for is a little bit more of a pullback in order to get long. Yet again, remember the interest rate differential is highly in favor of the British pound.

And therefore, I think you have to look at it through the prism of a scenario where you need to find value. The market is likely to see any short term pullback as an opportunity to pick up, cheap British pounds, especially if we get close to the 1.15 level. The 50 day EMA sits underneath there and offers technical support as well.

We Will Probably Break Higher Eventually

So, with all of that, I think you've got a situation where this is a market that is going to be one that I think eventually breaks out to the upside, but it is going to take a bit of a pullback in momentum building in order to make that happen. With this being said, the market is likely to be one that I think given enough time probably goes looking to the 1.20 level. But obviously we need to build up enough momentum and perhaps even enough value to get people aggressive early trading.

This market is one of my favorites, as the interest rate differential continues to be a massive boon for this trade. The buying of the Pound against the Franc means that you get paid at the end of the session every day, and this does add up over the longer-term. I am a buyer no matter what but would love to see a dip to take advantage of.

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