Forecast for the AUD/CHF Pair
AUD/CHF from a Fundamental Perspective
The Australian dollar fell against the Swiss franc on Wednesday after data showed core inflation rose slightly less than expected in the first quarter, although the ongoing impact of higher energy costs continues to prompt traders to anticipate further interest rate hikes.
The impact of rising energy, food, and raw material prices is expected to be greater this quarter, increasing pressure on the Reserve Bank of Australia to raise interest rates for the third time at its May 5 meeting.
Markets are pricing in a 75% probability of a 25-basis-point hike in the Australian interest rate to 4.35% next week, with the rate expected to reach 4.60% by September.
On the other hand, in Switzerland, inflation has recently stabilized at the lower end of the Swiss National Bank’s target range of 0–2%, which is seen as an indicator of price stability.
However, Switzerland faces a more uncertain outlook, with weak growth in the short term and expected inflation rising due to higher energy costs.
Meanwhile, SNB President Martin Schlegel stated during the bank’s general meeting that the central bank is open to adjustments in monetary policy and intervention in the foreign exchange market, reaffirming his inclination to buy foreign currencies to weaken the franc.
AUD/CHF from a technical perspective
The pair is trading within an ascending price channel on the 4-hour chart; it is possible that the pair will pull back to test the support level at 0.5622/30.
These support levels are located near the lower boundary of the ascending price channel.
We then target the 0.5665 level, followed by the upper boundary of the ascending price channel at the 0.5730 level.
This scenario fails if the channel is broken to the downside and the pair closes below the 0.5620 level.
In that case, a decline to the 0.5595 level, followed by 0.5550, is expected.
