The Aussie dollar has fallen hard against the Swiss franc in the early part of the trading session on Wednesday, as traders are running to safety again. However, there is support right here.
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AUD/CHF
The Aussie dollar has plunged against the Swiss franc to reach towards the 0.5680 level, an area that has been important resistance previously. But all things being equal, it's worth noting that we are still very much in an uptrend, and the markets might be reacting to increased tension in the Middle East, but this is something that comes and goes.
The interest rate differential continues to favor the Australian dollar, and the Federal Reserve, of course, having an interest rate decision later in the day, could come into play as well. That being said, I think this is mainly traders out there trying to get ahead of that decision, maybe flattening out trades that they've been in. This is typical, and by the end of the day, the situation could change drastically.
Buying Dips in an Uptrend
And I think, all things being equal, this is a market that I am buying dips in. I do think eventually we go much higher, mainly due to the fact that the Swiss National Bank is definitely wants a lower-valued Swiss franc, and at the same time, the Australian dollar is being pushed by commodity markets, which have been somewhat strengthening recently, especially when you think about some of the exports from Australia like gold, copper, iron, aluminum.
So, if there is more demand coming out of China, for example, that helps Australia significantly. The Swiss franc, of course, is considered to be a safe asset, but when you look at the market, we are just basically retesting the breakout point. This seems like a simple technical setup for me. I remain bullish. I have no interest in shorting.