NZD/CHF is so far the top mover today. On the one hand commodity are under broad selling pressure. Kiwi and Aussie are paring some of last week’s gain. Meanwhile, the Swiss Franc is surprisingly the strongest one for today. In particular, USD/CHF’s selling accelerates through 0.9952 support after weaker than expected US housing data.
To assess the outlook of NZD/CHF, we’d like to have a look at the bigger picture in the weekly chart first. Powerful rise from 2018 low at 0.6313 appears to be a medium term impulsive wave. The corrective fall from 0.7323 (2017 high) should have completed at 0.6313. Hence, rise from 0.6313 is possibly resuming the long term rise from 0.5831 (2015 low).
With that in mind, the current fall from 0.6884 short term top (on bearish divergence condition in 4 hour MACD), is likely just a corrective pull back. We’re currently viewing it as correcting the rise from 0.6462 only. Hence, while further decline is likely, downside should be contained by 38.2% retracement of 0.6462 to 0.6884 at 0.6723 to bring rebound. Break of 0.6884 will target 0.7210 resistance next.
Nevertheless, firm break of 0.6723 will argue that NZD/CHF is correcting whole rise from 0.6313. IN that case, deeper pull back could be seen towards 55 day EMA (now at 0.6607).
