AUD/CHF, AUD/USD and AUD/JPY Forecast – Aussie Dollar Showing Risk Appetite Direction

AUD/CHF Technical Analysis

The Australian dollar is slightly negative in early trading on Wednesday, but you can see that we have been grinding higher for a while, and I think this is a good look at what risk appetite is doing. We are trying to form a nice channel here in this pair, and unfortunately, most retail traders will ignore this pair, but what I do like about it is that, typically speaking, this is all about risk appetite.

The Australian dollar is a risk-on type of currency, and of course, the Swiss franc is a safety currency. Keep in mind that the RBA is likely to raise rates while the Swiss are going to keep them extraordinarily low. This continues to work to the upside over time if you are patient enough.

AUD/USD Technical Analysis

The Australian dollar against the US dollar is a little bit different scenario in the sense that we are running into a bit of a barrier at 0.71, but the US dollar is oversold. In fact, the US dollar has hit 14-year highs as far as short interest is concerned. With that being the case, there is probably a correction coming, but the Australian dollar is one of the stronger currencies out there, so I don’t think this one fall very far.

The 0.69 level, for me at least at the moment, is the floor. If we can break above 0.7150, it will reach escape velocity, and we will continue to go higher. I think this one eventually does rise, but it might be slower against the dollar than other currencies like the Swiss franc.

AUD/JPY Technical Analysis

Finally, the Australian dollar against the Japanese yen is slightly positive during the session and it looks like the 108-yen level is trying to offer a bit of a floor. If the market can continue to find support here, then I think we will go testing the 110-yen level again. The Japanese yen is one of the weakest currencies that I follow right now, despite the fact that recently it has seen a bit of a surge.

From a structural standpoint, when you look at the Japanese yen, for example, measured against the US dollar, we came awfully close to testing an almost 40-year resistance barrier. And we are starting to see that Japan really has no way out. They can’t really normalize rates; they have far too much debt. It would crush the economy. So, you can either pay the debts off or you can weaken your currency, and I think people are starting to come to that conclusion. I am a buyer at dips here, all the way down to at least the 50-day EMA.

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