Potential signal:
- I am willing to buy this pair right here, with a stop at 0.5780 below, aiming to see 0.61 over the longer-term.
- The Australian dollar has rallied against the Swiss franc again on Friday, as the interest rate continues to favor the upside overall.
- This is a pure carry trade situation for me.
AUD/CHF
Taking a look at the Australian dollar against the Swiss franc, the Aussie dollar showed itself to be very strong during the trading session on Friday as the interest rate differential continues to favor the Australian dollar. With that being said, I like the idea of buying dips here.
Top Regulated Brokers
This is a market that looks as if the 0.58 level is continuing to offer a bit of support. I also recognize that this is a market that has the 50-day EMA underneath, offering support. The interest rate differential is quite wide, and of course the Swiss National Bank is happy to stay at the zero level. The RBA is much more hawkish and could continue to raise rates based on the recent economic numbers.
Furthermore, from a technical analysis standpoint, this is a longer-term uptrend
It certainly looks as if that has not changed anytime soon. With this, any pullback has to be looked at as a potential buying opportunity. If we were to break down below the 0.5680 level, then the market could really start to unwind. But I think it would take a lot to make that happen, especially considering the interest rate differential. You would need some type of major external event.
The overall situation here still favors holding long and simply taking advantage of the swap. It does tend to be a somewhat quiet market, but it does tend to grind for long periods of time. This is more or less an investment than some type of short-term trading opportunity. This is a market that remains one of my favorite carry trades out there.
Want to trade our daily forex analysis and predictions? Here's a list of the best FX brokers in Switzerland to check out.