NZD/CHF is sitting right at the top of its descending channel, so I’m thinking of hopping in a short position right here.
Take a look!
This pair has formed lower highs and lower lows inside a descending channel visible on the 4-hour time frame.
Price is currently testing the very top of the channel, which coincides with the 61.8% Fib and .6500 mark. That makes it a pretty strong ceiling!
If that’s the case, NZD/CHF could slide back to the swing low near the .6400 handle or all the way down to the channel support.
Stochastic is heading lower to reflect the presence of selling pressure, but the oscillator is also closing in on the oversold region to signal exhaustion. Turning higher would hint that buyers are taking over and that a bullish breakout is due.
I’ve skimmed the economic calendar to look for potential catalysts, but the lack of top-tier releases from both New Zealand and Switzerland this week could leave it up to good ol’ risk appetite.
Market watchers might take cues from the U.S. non-farm payrolls report to see what this could mean for Fed policy and global borrowing costs.
In particular, an upside surprise might fuel tapering and tightening hopes enough to bring risk-off flows back in. I’ll be on the lookout for leading indicators that hint at strong jobs data since this could weigh on the higher-yielding Kiwi.
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