The Aussie Dollar dropped early on Thursday but has since seen a lot of buying against the Swiss franc.
AUD/CHF
The Aussie Dollar initially pulled back just a touch during the early part of the trading session on Thursday, but then turned around to show signs of real strength. This is a good sign as we reach towards the 0.5680 level, an area that has been a major barrier. If we can clear that level, then it would be a sign that we could go much higher.
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Risk Appetite and the Swiss National Bank Policy Factor
Ultimately, AUD/CHF is a pair that continues to see a lot of volatility and a lot of outside influence, as this is a market that is very driven by risk appetite. The Swiss Franc, of course, being one of the safer currencies out there to own, is considered to be a safe currency. With that, I think you have to understand that this market will continue to move based on how people feel about the world, and also the fact that the Swiss National Bank wants a weaker Franc. It does make sense. Eventually, we go higher if we get good news about economic growth and strength, which should help as well.
In the short term, I like buying dips. I think the 50-day EMA continues to offer support right around the 0.56 level. It's really not a market I look to short; I don't want to own Swiss Franc, and I certainly don't want to pay the swap.
If we break above the 0.5680 level, I'm looking for 0.60 over the longer term, but this is not a pair that typically screams in one direction or the other; you would just simply hang on to the position and build up your profit at the end of every day as you collect that swap.
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