The New Zealand dollar fell a bit against the Swiss franc on Thursday, as traders are attempting to digest the gains from the move higher that got us here.
NZD/CHF
The New Zealand dollar has fallen a bit against the Swiss franc during early trading on Thursday, and it looks as if the 0.47 level could be a bit of support, so we'll have to wait and see. Keep in mind this is a pair that's highly influenced by risk appetite, as the Swiss franc is considered to be a massive safety-based asset, while the New Zealand dollar is a little further out on the spectrum, mainly due to commodities and its exposure to Asia.
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It's worth noting that the 50-day EMA is trying to break above the 200-day EMA, kicking off the so-called golden cross, but we are not there quite yet. The Swiss National Bank also has no interest whatsoever in seeing a stronger Swiss franc, so it's not a stretch of the imagination to think that this pair could continue to go higher based on the interest rate differential and the lack of any type of defense by the Swiss.
Golden Cross Approach and RBNZ Hawkishness Support Upside
The New Zealand dollar has recently seen a bit of strength due to the RBNZ raising rates and sounding a bit more hawkish. Whether or not that ends up being the case remains to be seen going forward. But ultimately, what I'm seeing across the forex world as of late, the Swiss franc has been under pressure. We've seen it against the US dollar as an example.
So, with all of that being said, I do like the New Zealand dollar against the Swiss franc, despite the fact that it's been a pretty tough 24 hours. The reality is we probably need to go sideways for a little bit here, kind of build on the gains that we had made so quickly in this market before we can continue to the upside. I've got no interest in shorting this pair, although one could make an argument for it dropping all the way back down to 0.46 before it's all said and done. I think ultimately we're probably likely to see 0.50 over the next several months.
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