The NZD/CHF pair is one that you probably don’t trade quite often, but I do like this market a lot because it gives us a real insight into risk appetite around the Forex world, as the New Zealand dollar is considered to be a fairly “risky currency”, and of course the Swiss franc is considered to be a “safety currency.” Because of this, the pair tends to go higher when people are looking for some type of risk appetite sensitive assets, and of course pulls back when people are concerned
During the day on Tuesday, the market ended up turning back around to form a shooting star. The shooting star of course is a negative candle, and it’s likely that we could break down below the bottom of it and retrace back to the 0.6950 level. This is an area that’s been relatively choppy and consolidative lately, so given enough time I think that the buyers will return. I’m not looking for some type of major meltdown at this point, just a return to the consolidation area that we have been in for some time.
Summertime
Summertime of course is holiday season, and that’s especially true during the back half of August. With this being the case, I don’t think that there is enough in the way of volume to really push this market much higher. Because of this, the market will probably struggle to make any serious moves, but at this point it looks very likely that the market will go looking for support below in order to continue going higher once we get volume back into this market, which is probably going to happen in early September as per usual.
On the other hand, if we break above the top of the shooting star on Tuesday, I think that would be a buying opportunity, reaching towards the 0.7150 level above. With this, the attention this market, we could get a nice short-term trading opportunity.
