In bullish signal New Zealand dollar climbs against Swiss franc
The NZD/CHF pair tends to be very risk sensitive, as the New Zealand dollar is a commodity currency and of course the Swiss franc is probably one of your more famous safety currencies. With this being the case, I like to look at this market as a bit of a barometer for global risk appetite. As you can see, the market has been very negative for quite some time so it’s not a surprise that risk in general has been the same. That being said, we are starting to see signs of bullishness in this market again.
By breaking above the 50-day EMA, it’s very likely that the market is ready to continue grinding higher. The next major resistance barrier will be the 0.64 level which is the most recent highs. What makes that even more interesting is that the breaking of that level would complete a “W pattern”, a very bullish reversal signal. With that in mind, it’s very likely the traders would start to throw money into this market, and it would probably coincide quite nicely with a rally in equities, a selloff in bonds, and various other “risk on” type of movement out there. As risk appetite has been driven down lower, ironically the stock market has been grinding higher. A lot of this will come down to central bank quantitative easing, which typically will inflate the price of assets due to depreciating fiat currency. However, this pair is particularly interesting because it shows global flow, and perhaps people are betting on a return to global growth sooner rather than later. While PMI numbers have been lower around the world, the reality is that most are starting to already turn around, and China although a bit soft by historical norms is starting to show signs of life again. This is a pair worth watching.
By breaking above the 50-day EMA, it’s very likely that the market is ready to continue grinding higher. The next major resistance barrier will be the 0.64 level which is the most recent highs. What makes that even more interesting is that the breaking of that level would complete a “W pattern”, a very bullish reversal signal. With that in mind, it’s very likely the traders would start to throw money into this market, and it would probably coincide quite nicely with a rally in equities, a selloff in bonds, and various other “risk on” type of movement out there. As risk appetite has been driven down lower, ironically the stock market has been grinding higher. A lot of this will come down to central bank quantitative easing, which typically will inflate the price of assets due to depreciating fiat currency. However, this pair is particularly interesting because it shows global flow, and perhaps people are betting on a return to global growth sooner rather than later. While PMI numbers have been lower around the world, the reality is that most are starting to already turn around, and China although a bit soft by historical norms is starting to show signs of life again. This is a pair worth watching.
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