The NZD/CHF pair fell during the day on Wednesday, but most certainly there is going to be a lack of liquidity in this market. We find interesting about this pair is that it is such a pure play on risk appetite out there in the worldwide markets that it’s essentially a way to wager on what all stock markets around the world are going to do. After all, the New Zealand dollar is considered to be a “risky” currency while the Swiss franc is considered to be a “safe haven.” Because of this, the pair tends to rise when things are good, and fall when things are bad.
Looking at this chart, you can see that the resistance barrier is roughly the 0.69 level, but the 61.8% Fibonacci retracement levels there as well. I think that we are more than likely going to pull back and head back to the 50% Fibonacci retracement level which is essentially the 0.6550 level. I don’t think that this market has the momentum to continue going higher for at least the short-term, but obviously things can change when volume picks back up after the holidays.
Short-Term Trades
I believe that this is a short-term opportunity at best, as the market will more than likely be choppy between the 61.8% Fibonacci level and the 50% Fibonacci level. I think that there is a significant amount of support below, and that the 0.65 level will certainly be very supportive. In other words, I think that we will see a continuation of the choppiness and indecisiveness that the markets have been in, and that this could be a good scalpers type of opportunity.
Longer-term though, I do think that we eventually go higher but it will probably be a couple of weeks. Seems to be a little bit of a “holiday hangover” after the first of the year, and it takes the markets little while to get moving.
