NZDCHF Breaking Out
The recent rally in NZDCHF is starting to gather pace now. The move above the .6232 base has seen price blowing through .6387, currently stalled at the .6466 level. With the retail market more than 80% short the pair, there is plenty of room for the current rally to continue. Look for the current correction to hold a retest of .6387 as support, with the focus then on a break of .6466 targeting .6540 and the bear channel top, initially. Given the themes driving the current move, a break of the .6540 would be firmly bullish, putting focus on higher targets at .6622 next.
Keep An Eye On
The key driver behind this trade is the rebound in risk appetite we’ve seen recently. If risk markets can continue to find their footing, and push higher, this will be firmly supportive of NZD, while sapping safe-haven demand from CHF. Additionally, the hawkish expectations around the RBNZ look likely to also keep NZD well supported against CHF near-term.
Data wise this week, the SNB meeting on Thursday will be key. The SNB is likely to reiterate its intention to maintain a market presence in order to protect against excessive CHF strengthening. However, if the SNB strikes more of a concerned tone around upside inflation risks, this might lead into CHF buying, weighing on NZDCHF near-term.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.