The Aussie dollar has shown itself to be strong again on Friday, as traders continue to see a lot of value in the carry trade, as we are looking to see a lot of swap paying off for traders.
AUD/CHF
The Aussie dollar has shown itself to be bullish during the trading session on Friday as we continue to see the carry trade play out. This is being exacerbated by the speech by Kevin Warsh in the United States as the Federal Reserve looks to be tight with its monetary policy. That has people thinking the carry trade still has legs in general.
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It doesn't directly influence the Aussie or the Swiss franc against each other, but both are going to be losing some strength against the dollar, and with the Swiss National Bank interest rate policy firmly set to 0%, makes sense that this one continues to grind higher. You get paid at the end of every day, and that of course is the bonus here.
Technical Analysis
And I like the idea of buying short-term pullbacks. Those short-term pullbacks, for me at least, are opportunities to take advantage of getting paid at the end of every day and the overall momentum of the market. Let's be honest here, this is a market that has been taking off for some time now and looks like that isn't going to change anytime soon.
With this, I am still very bullish. I do believe that we continue to go higher. I'm watching the 0.58 level as an area of potential resistance and maybe a short-term target, but I think overall, this is still a market that will continue to look a bit like one that, it's a grind higher, it's not a huge shot higher, but we have already wiped out that candlestick from when the carry trade got walloped about a week and a half ago.
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