The British Pound have lightened up on its advantage over the Swiss Franc (GBP/CHF), especially over the last week as the exchange between the two has dropped -0.1736 Swiss Francs per Pound, an 'extra large' 8.7%. The value of one Pound in Francs fell a 'very big' 3.2% (CHF 0.0600) just on Monday, to close in New York at CHF1.7977. The exchange rate hasn't just been dropping in the last week either, this sharp decline dates back to early August, where the rate was as high as CHF2.0800 and EventEdge shows no sign of it slowing its descent.
Q: How has GBP/CHF responded to an 'extra large' five-day decline while trading below its 200-day average?
A: According to the seven previous occurrences of this event omitting any repeat occurrences within 10 trading days, EventEdge indicates that GBP/CHF has shown a very strong bearish edge that peaks 46 trading days after the event. Thus, the projected date for the peak of the bearish edge relative to the current event date (Monday, Oct. 27, 2008) is Friday, Jan. 2, 2009.
GBPCHF declines in 100% of the cases (7 of 7) by an average of 5.0% relative to the close on the event date. The overall return of the seven cases is -5.0%, which, based on the close of GBPCHF on the event date (CHF1.7977), provides a target price of CHF1.7078.
To see this in EventEdge® click here.
Mickey Schoenhals is an analyst with Markethistory.com.
