John J Hardy
Saxo Bank's head of forex strategy John Hardy expects the pound to trade lower. He says the UK economy has been hit with a big dose of uncertainty. Hardy says that the Bank of England will conduct quantitative easing, but he thinks the pound could make a quick rebound if the focus of the central bank and government is put on fiscal stimulus rather than rates cuts. In the short term, Hardy believes the GBPUSD is looking lower, but in the long term he thinks EURGBP and GBPCHF are turnaround candidates with regards to sterling strength.
Day trade
Trade view / 28 June 2016 at 12:08 GMT

Short-term opportunity to swoop on GBPCHF

Director / PIA First
United Kingdom



Last week saw the cross break out of the weekly Ichimoku Cloud to the downside after the Brexit camp came out on top.

We continue to trade inside a long-term expanding wedge formation which does have the eventual bias to break to the upside, however it is highly unlikely we will see this break any time soon.

Long-term bias remains to the downside with mixed and volatile trading expected to continue with better wedge-base support currently seen at around 1.2690.


Friday saw a retest of the valid wedge-top trendline after early Bremain optimism was overturned, forming a large bearish outside daily candle. This was followed by a gap open yesterday from 1.3239 to 1.3101 and we are currently trading at the levels not seen since January 2015.

Continued selling yesterday saw a second consecutive negative day, but the market failed to break Friday’s low and subsequent overnight buying has been posted.

Looking to the intraday chart, we currently trade in a short-term corrective channel formation. Although our long-term bias remains to the downside, the short-term reaction higher is positive and we view this as an opportunity to set longs whilst this corrective move higher plays out.

Ample reward/ risk today is gained through buying into mild dips. Our bespoke support is currently seen at 1.3000, and with this level acting as previous support, this is where we look to go long.

We look to set a hard stop for this trade below the trend of higher lows which currently comes in at 1.2972.

The channel top coincides with the hourly Ichimoku Cloud base at around the 1.3100 level, so our target for this trade will be placed just below here.

Management and risk description


Entry: buy GBPCHF in front of 1.3000.

Stop: a break below 1.2960.

Target: 1.3095 & 1.3200.

Time horizon: 1-2 days.

Corrective channel

 Source: Saxo Bank
Expanding wedge 5-yr chart

 Source: Saxo Bank

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more
28 June
assi assi
Hi Steve, is todays high (1.3903) wrong caut.....??
28 June
Steve O'Hare - First 4 Trading Steve O'Hare - First 4 Trading
It is a bad print at 22:05 from last night when markets re-opened


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