Markets seem to be in a much better mood lately, so I’m looking at a potential risk-on play with this short-term uptrend on AUD/CHF.
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- Chinese CB leading index up from 0.9% to 1.3%
- New Zealand headline retail sales up 1.6% vs. 0.5% forecast in Q3
- New Zealand core retail sales increased 1.8% vs. 0.6% forecast in Q3
- Global Times: U.S. and China “moving closer to agreeing” on phase one of trade deal
- Xinhua: U.S. and China reached trade consensus, to keep contact on remaining issues of phase one
- Alibaba shares make strong debut in Hong Kong
- U.S. House Speaker Pelosi: USMCA trade deal in sight
- BOJ Japanese core CPI y/y unchanged at 0.3% vs. projected uptick to 0.4%
- RBA Deputy Gov. Debelle: Significant pay raises unlikely in near future
- Debelle: Gradual lift in wages would be a welcome development
- Fed head Powell: Central bank is “strongly committed” to inflation goal, current policy likely to remain appropriate
Upcoming Potential Catalysts on the Forex Calendar:
- German GfK consumer climate index due 7:00 am GMT
- RBA Governor Lowe’s testimony at 9:00 am GMT
- U.K. High Street lending data due 9:30 am GMT
What to Watch: AUD/CHF
With the market mood picking up quite a bit in the past few hours, thanks to developments in trade talks and positive data, I’m looking at this risk-on play with AUD/CHF.
The pair has just bounced off the bottom of the channel on its 1-hour time frame but has plenty of room to climb before hitting the resistance at .6800. A bullish divergence can also be seen as price made higher lows while stochastic drew lower lows.
Looking at the pair’s average pip movement per day suggests that it could have room to hit the target at the top of the channel, and a stop of the same size should be good enough for an intraday trade.
RBA Governor Lowe still has a speech coming up, though, and any dovish hints could spur a break below the channel bottom. On the other hand, words of reassurance and optimism regarding the trade deal could keep AUD/CHF in its uptrend.