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Trading Outlook – NZD/CHF

Jarratt Davis
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Originally updated: 07:30

Trading Bias: LONG

Currency pair: NZD/CHF

Current Sentiment: Bullish

In today’s trading session we will be focussing on buying opportunities on the NZD/CHF.

Fundamentals:

The RBNZ struck a less-dovish than expected tone, after leaving rates unchanged at 3.5%, commenting that they are looking for a period of rate stability. Overnight this saw the NZD experience significant gains, we expect moderate gains on the currency for the rest of the week.

Meanwhile the SNB are very concerned by the rate on EURCHF with Europe being Switzerland’s primary trading partner, we can expect the central bank to take action on the EURCHF pair as they want to see price action back at 1.10. This would of course weaken the CHF across the board and it would be typical of the SNB to intervene at opportune times, for example they are less likely to take action whilst the EUR is being sold off and would await a reprieve to take action. In addition to this the NZDCHF pair is an attractive long on account of the divergence in interest rates with the opportunity to carry this position for the attractive swap.

Technicals:

We expect this pair to sell off during today’s session.

There is strong support at 0.7360 which could provide trading opportunities should the price pull back. Look for the price to bounce off this level if it retraces back to it.

Remember to be aware of intra-day news as this can very often change the sentiment which makes our trade weaker. Look for any news that could be negative for this pair, which would change the sentiment to bearish.

Other Market Moving News:

The dollar index briefly broke above 100.00 for the first time since 2003, sending EURUSD below 1.0500 a key psychological level.

On today’s calendar we have German CPI, US core retail and retail sales and unemployment claims, we also have comment BoE’s Carney later in the session.

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