By: DailyForex.com

The AUD/CHF pair fell during the day on Wednesday, breaking the back of two hammers from the previous sessions. However, you can see that the shooting star that was formed last week has proved itself to be true, as the market pullback. Looking at the chart, you can see that the Australian dollar has been gaining against the Swiss franc for some time, and most of you will not know this, but this market tends to be the inverse of the EUR/AUD pair. Both of these are been trending quite nicely for some time, and as a result I feel that selling this market even though we have a fairly bearish candle is the wrong thing to do. I’m looking for some type of supportive candle below in order to go long.

Nice trend, obvious channel.

This is a nice trend that we have in effect since the beginning of March, so therefore don’t really see any reason to doubt it’s now. The fact that we pullback from where we did doesn’t surprise me either, because quite frankly I believe that the 0.85 level offering resistance is hardly a big deal. Yes, it is a large, round, psychologically significant number, and as a result it makes sense that we could see the sellers come into play. However, I think that this is simply a pullback that will allow us to build enough momentum to finally break out and go higher.

On top of that, keep in mind that the Australian dollar is considered to be a “risk asset” as the Swiss franc tends to be more of a safety currency. With that, this measures the risk appetitive the global markets, rising when traders are fairly confident, and falling when they aren’t. As you can see, much like most of the stock indices in the United States, we have seen quite a bit of risk-taking overall. I believe this trend continues, but we may have a day or two of weakness which should offer value as the Aussie becomes a bit cheap in relation to the Swiss currency.

AUDCHF 73114

Related Articles
  1. Savings

    Best Places To Exchange Currency In Miami

    Miami may be a 24-hour party, but it takes plenty of cash to get in the groove. Here's where to exchange foreign currency before you head for South Beach.
  2. Mutual Funds & ETFs

    Comparing ETFs Vs. Mutual Funds For Tax Efficiency

    Explore a comparison of mutual funds and exchange-traded funds, or ETFs, and learn what makes ETFs a significantly more tax-efficient investment.
  3. Mutual Funds & ETFs

    4 Mutual Funds that Hold Tesla Stock

    Obtain information on the four mutual funds that have significant allocations to Tesla Motors, Inc. in their major portfolio holdings.
  4. Mutual Funds & ETFs

    4 Mutual Funds that Hold Apple Stock

    Discover mutual funds offering the most substantial percentage of holdings in Apple, Inc. stock that investors can use to get significant exposure to Apple.
  5. Investing Basics

    The 3 Best Investments Bill Ackman Ever Made

    Learn about the three best investments Ackman ever made. Ackman has demonstrated a consistent track record of success in all types of market environments.
  6. Entrepreneurship

    This Is How Donald Trump Became Rich

    Find out how "The Donald" got his start, where he made his fortunes and why Donald Trump used the power of brand recognition to become a billionaire.
  7. Entrepreneurship

    Top 5 Startups that Emerged in London

    Learn why London's startup scene is so prolific, and identify some of the hottest companies emerging from this scene as of mid-2015.
  8. Mutual Funds & ETFs

    ETF Analysis: Vanguard Small-Cap Value

    Find out about the Vanguard Small-Cap Value ETF, and explore detailed analysis of its characteristics, suitability, recommendations and historical statistics.
  9. Mutual Funds & ETFs

    ETF Analysis: Vanguard Intermediate-Term Corp Bd

    Learn about the Vanguard Intermediate-Term Corporate Bond ETF, and explore detailed analysis of the fund's characteristics, risks and historical statistics.
  10. Mutual Funds & ETFs

    Top 5 Precious Metals Mutual Funds

    Obtain information and analysis of some of the top-rated and most popular mutual funds that offer investors exposure to the precious metals industry.
RELATED TERMS
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s ...
  2. Theta

    A measure of the rate of decline in the value of an option due ...
  3. Record Date

    The cut-off date established by a company in order to determine ...
  4. Supply

    A fundamental economic concept that describes the total amount ...
  5. Purchasing Power

    The value of a currency expressed in terms of the amount of goods ...
  6. Investment Banker

    Someone working at an institution raising capital for companies, ...
RELATED FAQS
  1. Can my IRA be garnished for child support?

    Though some states protect IRA savings from garnishment of any kind, most states lift this exemption in cases where the account ... Read Full Answer >>
  2. Why is my 401(k) not FDIC-Insured?

    401(k) plans are not FDIC-insured because they are typically composed of investments rather than deposits. The Federal Deposit ... Read Full Answer >>
  3. Can I use my IRA savings to start my own savings?

    While there is no legal reason why you cannot withdraw funds from your IRA to start a traditional savings account, it is ... Read Full Answer >>
  4. Can creditors garnish my IRA?

    Depending on the state where you live, your IRA may be garnished by a number of creditors. Unlike 401(k) plans or other qualified ... Read Full Answer >>
  5. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  6. How does an IRA grow over time?

    Individual retirement account, or IRA, growth depends on many factors, including what types of investments are included in ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!