The Australian dollar continues to get you paid at the end of each day against the Swiss franc.
At this point, the market still favors the RBA and its outlook of potential hawkishness.
The Australian dollar has rallied against the Swiss franc for some time, and now the Friday session sees more of the same. The 0.58 level has offered a bit of support, and that support level should continue to be a major area of contention. The market rallying from here makes sense, considering that the interest rate differential continues to favor the Australian dollar, while the Swiss National Bank, on the other hand, simply is stuck in the zero-interest-rate situation and has no interest in raising rates whatsoever.
Top Regulated Brokers
I like buying dips here
With that being the case, I like the idea of buying this dip. I do think that we continue to see interest in going long here. The Australian central bank has been quoted recently as suggesting that it will have to raise rates later, and in that environment, there is no real argument to be made for shorting here.
This would take some type of major situation where people run for safety, and by safety I mean safety via the Swiss franc, for the trend to change. Ultimately, this is a market that I think short-term dips continue to give buying opportunities going forward.
The 0.59 level above is a simple target, but we could break above there, going to the 0.60 level. Over the long term, you get paid to hold the Australian dollar against the Swiss franc, and I think that will continue, especially in this environment, to be the way traders look at this currency pair. This is a market that remains bullish, as we are looking at this as a carry trade. This is a situation where you can be patient.
Ready to trade our analysis of the AUD/USD? Here is our list of the best Forex brokers worth checking out.