The GBP/CHF was one of the pairs with the lowest volatility in the second half of 2019, and this remains true at the moment, despite new factors. On the chart, we still see the flat trend formed in December, and even the coronavirus has not changed the situation.
The spread of the virus has so far indirectly affected the pound, but this currency is influenced by internal risk factors, the main of which, of course, is the process of Britain's exit from the EU, as well as the impact of this process on the UK economy. The pound came under pressure last week due to conflicting reports regarding negotiations on a trade agreement with the EU, after the final exit of the UK. At the same time, macroeconomic reports were quite good in February. In particular, business activity indices are above the level of 50 pips and continue growing, while industrial production output reached the highest level in 10 months.
However, the risks associated with the economic downturn in the EU, as well as the spread of the virus in Europe, can change the situation in favor of the CHF. The franc, as a safe asset, can count on support when negative processes develop in the global economy. In this case, the support line will be broken and a downtrend will form. Most technical analysis tools tend to the deals to SELL, which gives us a reason to expect that short deals will be the most effective in the near future. The market entry points can also be indicated at the levels of 1.2816 and 1.2531. Achieving the latter one is the most likely scenario at the moment.
