In early May a rapid downtrend was formed. In just 3 weeks the pound fell in price from 1.3385 to 1.2695 CHF, despite the Swiss franc also being under the influence of some factors that negatively affect the pound, such as the economic downturn in the EU and in the country's economy.
The Swiss franc receives the least amount of support amid safe assets. In addition, the Swiss Central Bank is not interested in a strong franc and conducts the appropriate monetary policy. This did not prevent the strengthening this month against the GBP, and in general there are good perspectives for the continuaion of this strengthening, given the development of the trade conflict between the US and China, the uncertainty with Brexit in Britain and the resignation of Prime Minister Theresa May, as well as the results of the elections for the European Parliament. Economic statistics are of secondary importance for the CHF as they differ little from the general trends in the EU. Nevertheless, given the formal status of the franc as a safe asset, this currency has a good chance, unlike other currencies in the region, including the Euro.
The pound has been cheaper for a long time against most currencies due to the deadlock with Brexit. The uncertainty is heightened by the resignation of Theresa May and the likely early elections. At the moment, all options for leaving the EU have been rejected. Brexit is delayed for an undefined period and it's not certain whether it will take place at all. The possibility of the future Prime Minister to break the deadlock also raises doubts. In such circumstances, the economy of any country will not develop, although so far the economic situation in Britain corresponds to the general trend across the EU.
The rate of the GBP/CHF pair will continue in the near future under the influence of the elections for the European Parliament, as well as the reports to be published next week on the Swiss economy: the GDP for the 1st quarter of 2019, the employment rate, and the index of leading economic indicators. External factors will also matter, forming demand for safe assets.
At the moment, we can see the price correction, which is unlikely to be long. In the medium term the Swiss franc can continue decreasing to the minimums of 1.23 - 1.25 CHF reached half a year ago, and there are still enough incentives for this. Therefore, the deals to SELL will be the most effective, which is confirmed by most technical analysis tools.
