The Australian dollar has been noisy on Wednesday against the lowly Swiss franc, showing signs of a potential breakout eventually.
AUD/CHF
The Australian dollar has been choppy against the Swiss franc during trading on Wednesday as we are stretching to fresh new highs. As we look at the 0.57 level above, it looks as if it is offering a little bit of psychological resistance, but I also recognize that it is yet another round number, not really that big of a deal. Ultimately, this is a market that continues to see a lot of questions and thoughts about whether or not risk appetite is going to continue to expand or contract.
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The Australian dollar is considered to be riskier than the Swiss franc, and it's probably worth noting that the Swiss National Bank is very negative on its own currency. It's trying to keep the value of the franc down as it had gotten so strong.
Risk Appetite and Technical Levels
Ultimately, this is a market that short-term dips probably look at as value, and pullbacks at this point in time should be looked at as potential value in a market that has been in an uptrend for most of the year. We have recently broken out of consolidation and if we can clear the 0.57 level, I suspect that we have much further to go. In that environment, I have no interest whatsoever in shorting, and I do look at every time this market pulls back as a potential way to find cheap Australian dollars.
This is a little bit of an esoteric currency pair to use, but I like to use it as a risk barometer. When you look at indices around the world, they are climbing or at least trying to recover, and that's probably something worth paying attention to in and of itself. So with that being said, I like the idea of just simply building a longer-term buy-and-hold type of position here, but I don't necessarily want to do it all in one go.
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