The rates continue in the frames of the rapid downtrend formed in May amid the ongoing economic downturn in the EU, as well as the political crisis in Britain. The decline in the pound against safe assets was the most significant, given the steady demand for safe assets.
This week the market was more optimistic due to the resumption of negotiations between China and the United States to resolve their trade conflict. Nevertheless, the pound continues to lose its positions, reaching this week the lowest level for the whole year. Following the meeting of the Bank of England, the rate remained unchanged. At the same time, the forecast of economic growth was revised from 0.2% to 0.0% due to the uncertainty with Brexit. Still, there are growing concerns about the hard scenario of the country's exit from the EU, given also the strengthening of the position of the supporter of a quick Brexit, Boris Johnson, in the race for the post of Prime Minister.
Ehe economic downturn in the EU continues and is confirmed by the publication of every other macroeconomic report. This puts pressure on both currencies, but the Swiss franc has the advantage of being Europe's main safe asset. This is what allows the CHF to strengthen against the Pound, although the situation in the Swiss economy is identical to the overall one across the EU.
In this situation, we suppose that the deals on the trend will be the most optimal. The pound will remain under pressure due to Brexit and the CHF will be able to count on support as a safe asset. Most technical analysis tools, including the Stochastic oscillator, are also inclined towards the deals to SELL.
