Pound/Swiss fell dipped below 1.50, down below the lowest level reached back in October, which matched the lows reached in the height of the financial crisis. Update on the cross.
This is a result of a sharp drop in the British pound combined with a slightly stronger Swiss franc.
GBP/CHF had the sharpest fall on Monday, December 2008, when it dropped from a close at 1.7448 and down to 1.6638 – an amazing 810 pips in one day. In the days that followed, it went as low as 1.5118 but closed higher. In October, the lowest closes were at 1.5092. We’re about to see an even lower close.
The British pound dropped today on a disappointing rise in the unemployment rate, and it couldn’t recover. While other currencies such as the Euro and the Aussie traded in ranges, the pound just went lower, with GBP/USD hitting 1.56. In the meantime, USD/CHF traded in range, but it already made a big drop yesterday.
Fears about the debt crisis send money to the Swiss franc, a “safe haven” currency. The Swissy is returning to its role as a safe haven currency, and in recent days, it rides on the debt crisis more than the Euro falls on it.
GBP/CHF is now in uncharted territory. Continued drops depend more on the underlying majors. A recovery will meet significant resistance at 1.53 and 1.60 – levels which have worked as clear levels of support and resistance for this cross.
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