A month ago, we headlined "The Swiss franc takes a slap in the face". While technically the deal had already been struck against the euro, other currencies joined in. In other words, carry trade enthusiasts can now rely on the Swiss currency to finance their operations in more profitable currencies. The CHF is an attractive alternative to the Japanese yen, given the risks of the Bank of Japan intervening to support its currency.

Source: Bloomberg

The chart above shows the weekly AUDCHF trend over a five-year rolling period. After evolving within an ongoing downtrend since 2022, it has broken out of its downtrend channel at the top of a flat consolidation (green rectangle). If the upper limit of this accumulation phase is breached, along with the 40-week (200-day) moving average and bullish divergences on the RSI, recovery targets of 0.6169 or even 0.6350 could be set. In this case, the 0.5815 support level should no longer be breached at the daily close.

Elsewhere in the world, the EURUSD has just made its pullback towards the former support at 1.0708 and remains under downward pressure until 1.0730/60 is breached. The downside target remains around 1.0537/06. The same applies to sterling against the US dollar, which also just tested its former support turned resistance at 1.2500/30, which should mark the resumption of the downtrend underway since the beginning of March.