- The New Zealand dollar has rallied slightly against the Swiss Franc in choppy trading and is also finding itself in a very interesting spot.
- This has a lot to do with why I'm doing this analysis today, because we are testing the 50 day EMA.
If we can break above the 50 day EMA, this is very likely going to be a situation where traders try to reach the 0.4850 level. And then after that, we could really get moving perhaps to the 0.50 level. All things being equal, this is a pair that I watch quite frequently because it can at times at least give you an idea as to what risk appetite is overall risk appetite of the markets, probably a little bit jittery, mainly due to the fact that we are in the middle of summer.
So, volume is an issue. And of course, we have a situation where there are a lot of questions about global trade. Switzerland finds itself at the end of a pretty heavy tariffs by the Americans while New Zealand, to be honest with you, I don't even know if they're facing anything other than a standard 10%.
USD-Denominated Pairs Influence This One
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So, while neither are massive trading partners with America, it certainly does have an influence on their currencies against the U S dollar, which has a knock on effect over here. We are in a massive consolidation area. And if we can take out that 0.4850 level, then we could go looking much higher. All things being equal, if we do pull back from here, the 0.4725 level is the floor. And I think if we break down below there, then we could really start to take off. But this is a market that I think is in the middle of trying to form a double bottom. We'll just have to see if it plays out and if we get that signal to the upside. Remember, you get paid swap to hang on to it as well.
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