In yesterday’s posts, we highlighted the spike in de-risking market activities. As a result, safe haven currencies (e.g. USD, CHF, JPY) appreciated sharply.
This is noted in GBPCHF. The rate, which has been falling steadily since mid-April, suddenly nosedived and touched 1.3200 intraday. This takes its correction from its 2018 highs to more than 600bps.
However, the rate of decline appears to be ‘climactic’. In other words, the correction could be near exhaustion – as most short-term buyers are already stopped out – and ripe for a counter-trend rally. We anticipate a 100-150 point rally from yesterday’s lows.
On the macro front, today’s UK April retail sales figure is better than expected.
Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.
Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University.