The NZD/CHF pair isn't one that most of you trade over the longer term, but it is one that you should be paying attention to. This is because it is very sensitive to the risk appetite of markets in general, not just in New Zealand or Switzerland. This is because the New Zealand dollar is such a "risk on" type of currency, while the Swiss franc is a "safe haven" currency. Quite frankly, all things being equal, this pair should rise in times where the risk appetite is great, and fallen times where it's not.
During the Monday session, you can see that we formed a nice looking shooting star, which of course is a very bearish sign. It's based on the 0.7550 level, which has been resistive in the past, as recently as September. Because of this, it makes sense that we would see a bit of resistance here, and I believe that this signifies that the risk appetite will dampen a bit over the course of the next couple of sessions, based mainly upon the resistance that we are starting to see.
Shooting stars
Not only did Monday form a shooting star, so did the Friday session. The fact that both of these sessions looks so resistive suggests to me that this market will continue to struggle, and therefore selling of this market is probably going to be the only way to trade it.
However, you have to keep in mind that a break of the top of the shooting star would in fact be a very bullish sign and have me jumping in the market to the upside. I don't think that's what's going to happen, and as a result I am looking more for selling pressure below the 0.75 handle. That of course is a large round psychologically significant number, and of course it will attract various types of people looking to both buy and sell in that region. However, I do believe that ultimately we break down below it, and head towards the 0.74 level.
