By: Christopher Lewis
AUD/CHF isn’t a pair that most traders follow. The fact is that they should, but they simply don’t as a rule. One of the greatest things about this pair is that it tends to trend for very long stretches of time. Traditionally, it is a pair that shows the risk sentiment of the overall markets as a chart. The idea is that the Australian dollar is normally bought up with both the commodity trade and the interest rate yield play. Simultaneously, the Swiss Franc is bought as a safety currency. With this being said, as this chart rises, the risk sentiment is high and vice versa when it falls.
However, over the last few months the Swiss National Bank has been working against the value of the Franc on the whole, and this skews the personality of the Franc a bit. The Aussie is still recognized as a “risky” asset, but the second half of this equation is undoubtedly pushed lower because of the central bank’s actions. However, the long trending attitude of this pair remains intact, and this allows nice trading opportunities if you are patient.
Technicals for the AUD/CHF
The AUD/CHF is currently trending to the upside, and has been for quite some time. This shows that the Aussie is loved among traders as the pair has been relentless as the grind continues. The pair doesn’t necessarily move massive amounts in 24 hours, but it is presistant as you can see on this chart.
The 20 day moving average (shown in light blue) and the 50 day moving average (shown in purple) are both positively sloped at the moment, and the pair has recently accelerated to the upside as you can see. The 0.95 level was resistive, but gave way a few days ago. The highlighted candle at the 0.96 level is a hammer, and this shows an attempt to bring this pair back down, only to fail. This is another sign of strength in my opinion.
The move on Wednesday was a bit strong, so at this point in time I have my bias. However, I think it is a little over bought at this moment, and I will be looking to buy pullbacks. The hammer at 0.96 could be the place where I see support coming into the market, and I will buy with no real hesitation then. The 0.95 level is the other level I am interested in. If I get a hammer or bullish candle at one of these levels on a pullback, I will buy this pair. Until then, I need to see that pullback, which we often get after an impulsive move like this.