All About the Crosses: GBP/CHF

All About the Crosses: GBP/CHF

7 September 2014, 03:11


GBP/CHF experiences a high degree of volatility, and is perfect for traders who like to catch big moves in the market! It is the most popular carry trade in the FX market aside from GBP/JPY.

For a pair with high volatility like the GBP/CHF, Fibonacci lines are an excellent way to identify price levels to which the pair will retrace after a big move. Slow stochastics can also reveal potential reversal points - ideal places to enter and exit the market when it is not trending. This pair also tends to hesitate near its 100-day simple moving average.

The best time for active traders to trade GBP/CHF is when the US and European sessions overlap, from 8:00 AM EST to 11:00 AM EST; however, moves in this volatile pair can be substantial even intra-day.

What moves GBPCHF

  • Comments from the Bank of England
    Since GBP/CHF is a very popular carry trade, changes in the interest rate outlook can significantly affect the value.
  • UK inflation data
    The Bank of England tightens interest to control inflation, so the market watches inflation data to anticipate upcoming changes.
  • UK growth
    Growth in the UK is carefully monitored for any signs of a downturn or upturn. Growth can affect inflation, which in turn can affect interest rates.

Fundamentals to Watch

  • BoE Meeting
    Policy statements from the Bank of England. Changes in interest rates will affect this pair since it is a carry trading pair.
  • UK Unemployment
    Amid fears of a "jobless recovery," the market has become very sensitive to this indicator, which measures new jobs created in the UK.
  • UK Retail Sales
    Measure of the level of consumer interest in the UK. Consumer spending is one way to measure robustness and growth in the economy.
  • UK Inflation
    Inflation is closely watched since it can affect Bank of England interest rate policy.
  • UK Housing Prices
    The UK interest rate outlook is closely tied to how the housing market is doing; if growth is too little or too great it can affect monetary policy.
  • Swiss KoF Leading Indicators
    A composite of business surveys from various sectors of the economy (industry, retail and wholesale). It is combined to form a leading indicator that aims to project GDP growth approximately 8 months into the future.
  • Swiss CPI
    Consumer Price Index. A measure of inflation in Switzerland; a significant change may have implications for interest rate policy in Switzerland.
  • Comments from Swiss officials
    Watched for any indications of change in Swiss monetary policy.
  • Swiss GDP
    Gross Domestic Product. A measure of growth and productivity in the Swiss economy.
  • SNB Rate Decisions
    Any changes in the interest rate by the Swiss National Bank has implications for the pair as a carry trade.

Share it with friends: