The Aussie dollar has rallied a bit against the Swiss franc during the trading session here on Tuesday, breaking above the 0.5680 level again. At this point in time, it looks like we are going to clear the 0.57 level and then eventually the 0.5750 level.
This is a market that continues to see a lot of noisy behavior and a lot of short-term pullbacks offering buying opportunities. The 50-day EMA sits right around the 0.5640 level and that offers a bit of support. This has been the pattern so far.
Risk Appetite Remains Important
All things being equal, AUD/CHF is a pair that pays close attention to the overall risk appetite as the Australian dollar is a commodity-based currency and the Swiss franc of course is a market that offers safety when people are really worried about the geopolitical situation. That being said, the interest rate differential continues to favor the Australian dollar. And I do think that the overall trend continues with you getting paid at the end of every session.
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If the market were to break down below the 200-day EMA, then it opens up the possibility of a huge turnaround. But at that point, I think you are beginning to really worry about the global economy. I think in that environment, I probably short the Aussie against the dollar, but I would have to see how that plays out.
Ultimately, I like the idea of buying dips. I recognize that this is a very noisy and choppy market. if you hang out, collect the interest at the end of every session and just let it do what it does, it makes for a nice longer term buy and hold situation. This market is more of an investment than anything else, as it pays nicely over the longer term.
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