NZD/CHF: Kiwi Bounces, As The Swiss Work Against Their Currency
Christopher Lewis | Jan 14, 2016 12:47AM ET
During the last couple of sessions, we have seen the New Zealand dollar bounce a bit from the 0.65 level, as it continues to offer significance in this market. The pair is typically thought of as a barometer of risk appetite by Adrian and myself, but lately the Swiss franc has been pummeled by quite a few other currencies. Because of this, I think this pair is more about the franc than anything else. After all, the Swiss have been very quietly been working against the Swiss currency yet again.
I am not a fan of the kiwi itself, but in the end I recognize that I don’t have to. The pair is obviously trying to rally overall, and with that the returns come back to my account as US dollars, no matter what currency I am trading. The market is offering a nice range trading opportunity, as the 100 day exponential moving average is just below the current pricing of this market. The EMA is also turning to the upside, so having said that it looks as if the momentum is trying to pick up.
The yellow box on the chart shows the current range that I think we are trading in. The 0.69 level is still a resistance barrier that will be difficult, and I think it will extend to the 0.70 level as far as that is concerned, and the longer-term move wont happen until the market clears that level. Until then, I would expect to see this market to pull back again and again, and as a result this pair is a great short-term trading market for those who are so inclined. (Most trades will be of the 3-4 day variety.) The 0.6450 level below is massively supportive, and with this, as long as we stay above that level I am willing to buy pullbacks, as the support has been strong.
Going forward, I do expect the breakout to come sooner or later. Until then, I will simply take the 400 pip range that we are involved in at the moment. It is areas like this on a chart that can often be the most reliable, and therefore the most profitable. As a matter of fact, a large portion of my profits for the year tend to be in these consolidation areas.
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