What's next for the British Pound ?

Sterling was the worst performer of G10 currencies in the last two weeks, but what's next?

I still do think that in the long term the pound will struggle more than its peers, because of Brexit deal headwinds and the recent lockdown restrictions that PM Boris Johnson has addressed will certainly have an impact on the UK economy, but in the short term though I do believe that the panic is over and we're due for a pullback,

the best way to express this idea is through a GBPCHF long, here are my five reasons why?

1) As I mentioned the recent downward move in the Pound is now too extended, and we've reached the oversold territory on the RSI,
2) Governor Bailey assured the market that negative interest rates are in the toolbox but it will not be implemented in the next few months,
3) As the furlough program comes to an end in October, UK finance minister, Rishi Sunak has announced the new jobs support scheme that will run for about 6 months,
4) In the recent months the Swiss Franc has benefited from the euphoria that Europe recovery will be faster than the US, but this narrative is starring to fade, especially after the last EU PMIs numbers this week, and that will weigh on the Franc,
5) And technically, the pair reached key support of the daily range and formed a double bottom, which is a formation that indicates a potential reversal,

Article by Halim Haddad,

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