The Canadian dollar continues to see a lot of noise on Thursday, as we are looking at the market via the carry trade, with the Swiss choosing not to hike rates in early trading.
CAD/CHF
The Canadian dollar has been all over the place during the trading session against the Swiss franc on Thursday, as the headlines continue to be very noisy. The Canadian dollar continues to see a lot of volatility, mainly due to the oil markets and the fact that Canada still finds itself in a trade war with its biggest partner.
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Furthermore, we had the Swiss National Bank hold rates at 0% during the session, which was expected, but there was also a bit of volatility around some of the statements. Nonetheless, it is still a situation where traders are looking at this as a carry trade play and carry trade-type situation. This is the main appeal to me for this pair, and I suspect that we will continue to see the longer-term move to the upside playing out.
The 0.59 level above is a target.
The 0.59 level is a large, round, psychologically significant figure. With the 50-day EMA sitting near the 0.5825 level and the 0.58 level offering support, I believe that this is a market that continues to be a situation where traders will be looking to buy on the dip.
I do not have any interest in shorting this pair. I do not want to pay the interest rate differential at the end of every day. If you are patient enough, you can take advantage of a market that should rise over time, but will pay you in the meantime to sit there and hold on to it. That is exactly how I trade most Swiss franc-denominated markets.
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