The Australian dollar fell a bit in the early part of the session on Monday, as we continue to see a lot of volatility.
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AUD/CHF
The Australian dollar initially pulled back just a bit to show signs of negativity against the Swiss franc but has turned around to show signs of strength again. Ultimately, this is a pair that's been in a nice uptrend for some time, and the interest rate differential certainly favors the Australian dollar over the Swiss franc.
With all of that being said, I like the idea of buying dips and collecting the premium and swap at the end of every day. The swap, of course, is going to continue to be one of the major factors for traders, but there are also questions about whether or not we see more risk appetite out there. After all, the Swiss franc is considered to be one of the safer currencies out there.
So, despite the fact that the world is basically on fire, there are some concerns about commodities, and commodities have been rallying, so at the same time, you have questions about the Australian economy. All things being equal, the momentum is to the upside and remains that way.
Upside Targets at 0.5750 and 0.5850
With this market looking like it's going to try to find its way to the 0.5750 level, and then after that, the 0.5850 level. This is not a commonly traded pair, so it does take some time to get where it's going, but again, the best thing is that you get paid at the end of every day to hold long, and that's exactly how I plan on trading this.
I like buying short-term dips and have no interest whatsoever in shorting as the Swiss National Bank continues to desire a weak Swiss franc. This is another factor that will continue to provide a lift.