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NZD/CHF has been a strong performer and with the trend still looking pretty healthy, I’m looking at this technical setup to play my fundamental bias on both the Kiwi and Swiss franc.

NZD/CHF Uptrend Pullback

NZD/CHF 1-Hour Forex Chart
NZD/CHF 1-Hour Forex Chart

The market seems to have been a Kiwi bull since the RBNZ signaled that it wouldn’t turn to negative rates just yet, which I think is a theme that is likely to continue to give NZD an edge over some of the other major currencies.

One of those currencies is the Swiss franc, which due to its “safe haven” status, has fallen out of favor as the market has gotten more risk-on with every new piece of vaccine news. It also closely correlates with the euro, which could be fading as rising covid cases and new lockdown protocols are set to pump out bad economic numbers down the road, as signaled by the latest sentiment data (Flash Eurozone PMI signals steep downturn in November amid COVID-19 lockdowns).

With that kind of back drop and no major catalysts that I can see right now to derail it, I’m bullish on NZD/CHF for now, and would like to enter a position on a pullback to the rising ‘lows’ pattern / broken swing high.

We can see on the one hour chart above that the pair has been in a steady uptrend, but could be in for a pullback after breaking above a previous swing high around 0.6330.

I’ve set an alert that trendline above, and if alerted, I’ll reassess the environment to see if the trade still makes sense. If the fundies line up with the price action, I will set orders for a buy position in my next post, so until then, we’re in wait-and-see mode for now.

What do you guys think? Better to wait for a confirmation pattern or set orders right now. As always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.

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