AUD Breakout Puts Swiss Franc Back on Defensive

The Australian dollar (AUD) has been showing signs of a resurgence against the Swiss franc (CHF), after years of decline. Since 2012, the AUD had been consistently losing ground, but recent technical analysis suggests that this trend may be reversing.

This shift is partly attributed to the differing interest rate policies of the Reserve Bank of Australia (RBA) and the Swiss National Bank (SNB). While the RBA has been increasing rates, the SNB has kept its rates near zero, making the franc less attractive. This divergence has supported the AUD's breakout from its previous stagnation around 0.56.

If the AUD can close above its 200-week moving average, it could propel the currency towards 0.59 or higher. In fact, analysts predict that it may even target the May and July 2024 highs of 0.6081-0.6099. However, if this breakout fails to sustain itself, the AUD may return to bearish trends, with support levels at 0.5540 and 0.5.