A dangerous situation for AUSD
The Australian dollar has been building up a bit of pressure against the Swiss franc for a moment, as the markets are taking on a different attitude than recently. It has been all “risk off” until recent action, as traders feared central bank tightening. However, over the weekend the SNB had a couple of members suggested perhaps although the Swiss may tighten monetary policy going forward, they are much closer to what they consider a comparable rate than they were before. In other words, monetary policy in Switzerland is probably almost complete.
The Australian dollar will have tailwinds behind it due to the fact that the RBA is somewhat aggressive and hawkish at the moment, but perhaps more importantly, China is reopening. It is through this prism that we have seen the Australian dollar rally as of late against most currencies, in the Swiss franc has been no exception.
AUD/CHF from a technical analysis standpoint
You can see that the chart has recently bounce from the 50-Day EMA and the MACD is turning higher. The 0.65 level, a large, round, psychologically significant figure, sits just above and will obviously attract a lot of attention. The fact that the 200 day EMA is sitting there as well also makes it just that much more important. At this point, the AUD/CHF pair has to decide whether or not it can overtake the 0.65 handle. If the markets close on a daily candlestick above that level, it could kick off more buying, perhaps sending the pair as high as 0.6650.
Alternatively, if the market does in fact fail there, it would not be surprising at all to see the market pullback to go looking for buyers near the 50-Day EMA. Quite often, it is between these 2 moving averages that you see some type of squeeze in the market that gets things moving.
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