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Swiss investment bank Julius Baer have recommended clients 'go long' on Sterling against the Swiss Franc, saying "a recovery has likely started."

The call to bet on further advances in the Pound-to-Franc exchange rate comes as the pair rate is quoted at 1.2152, a sizeable 1.16% higher on a day-to-day basis.

This leaves the exchange rate at its highest level since July.

And, according to Mensur Pocinci, Head of Technical Analysis at Julius Baer, the exchange rate is now bottoming, following a "washout" that saw it fall from the highs traded towards 1.34 back in early May.

"GBP/CHF probably saw a washout when it declined to its 2016 lows. A recovery has likely started – go long," says Pocinci.

Image courtesy of Julius Baer

"It looks like a mediumterm recovery has started. A rise above 1.2340 would most likely open the way towards 1.2750," says Pocinci.

Sterling has been pushing higher over recent days as it became clear that parliament had succeeded in thwarting Prime Minister Boris Johnson's plans to keep alive the prospect of a 'no deal' Brexit taking place on October 31.

Having passed a Bill outlawing such an outcome, MPs have allowed foreign exchange traders to bet on a recovery in the Pound, for the time being at least.

While the prospect of a 'no deal' has been removed, the question of how Brexit will resolve remains.

"GBP has gained some support from reduced risk of an imminent no-deal Brexit, but intensified uncertainty will dominate and cap gains for a continually volatile GBP," says Tim Riddell, at Westpac in London, adding:

"The intensity of uncertainty is evidenced this week in the deterioration of both manufacturing and service sector PMIs, which showed heightened risk of a Brexit-related recession. The firmness of the labour market also looks to be vulnerable."

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