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. Trading Strategies

    How To Buy Penny Stocks (While Avoiding Scammers)

    Penny stocks are risky business. If want to trade in them, here's how to preserve your trading capital and even score the occasional winner.
  2. Mutual Funds & ETFs

    ETF Analysis: Vanguard Total World Stock

    Learn about the Vanguard Total World Stock exchange-traded fund, which invests in stocks located in numerous countries with a high level of diversification.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  4. Retirement

    The World's Most Luxurious Retirement Destinations

    If money is no object (or if you would just like to dream), these five spots are the crème de la crème.
  5. Investing

    How To Calculate Minority Interest

    Minority interest calculations require the use of minority shareholders’ percentage ownership of a subsidiary, after controlling interest is acquired.
  6. Markets

    Moral Hazard in the Chinese Market

    The Chinese government faces the issue of balancing its desire to maintain stable markets through manipulation with the danger of a looming bubble if stock prices run up too much.
  7. Credit & Loans

    Can Corporate Credit Cards Affect Your Credit?

    Corporate cards have a hidden downside. If the company fails to pay its bills, you could be liable for the amount and end up with a damaged credit rating.
  8. Mutual Funds & ETFs

    ETF Analysis: BioShares Biotechnology Products

    Learn more about the BioShares Biotechnology Products fund, an exchange-traded fund that is focused on producers of FDA-approved drugs.
  9. Mutual Funds & ETFs

    ETF Analysis: SPDR EURO STOXX 50

    Learn about FEZ, the Euro Stoxx 50 ETF. FEZ tracks the 50 largest companies in Europe, making it the Dow Jones Industrial Average of Europe.
  10. Mutual Funds & ETFs

    ETF Analysis: ProShares UltraShort Nasdaq Biotech

    Learn more about an innovative inverse-leveraged sector exchange-traded fund, or ETF, the ProShares UltraShort Nasdaq Biotechnology fund.
RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Profit Margin

    A category of ratios measuring profitability calculated as net ...
  3. Dividend Yield

    A financial ratio that shows how much a company pays out in dividends ...
  4. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  5. Operating Margin

    A ratio used to measure a company's pricing strategy and operating ...
  6. Cost, Insurance and Freight - CIF

    A trade term requiring the seller to arrange for the carriage ...
RELATED FAQS
  1. Are spousal Social Security benefits taxable?

    Your spousal Social Security benefits may be taxable, depending on your total household income for the year. About one-third ... Read Full Answer >>
  2. What are the best ways to sell an annuity?

    The best ways to sell an annuity are to locate buyers from insurance agents or companies that specialize in connecting buyers ... Read Full Answer >>
  3. How are non-qualified variable annuities taxed?

    Non-qualified variable annuities are tax-deferred investment vehicles with a unique tax structure. After-tax money is deposited ... Read Full Answer >>
  4. Why would someone change their Social Security number?

    In general, the Social Security Administration, or SSA, does not encourage citizens to change their Social Security numbers, ... Read Full Answer >>
  5. Are spousal Social Security benefits retroactive?

    Spousal Social Security benefits are retroactive. These benefits are quite complicated, and anyone in this type of situation ... Read Full Answer >>
  6. Is Argentina a developed country?

    Argentina is not a developed country. It has one of the strongest economies in South America or Central America and ranks ... 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!