TURN BY TURN | THE CROSSSNAP: AUDCHF (HEDGED) OANDA:AUDCHF | LONG | INTRADAY
The Story
I arrived at my desk at about 8:15 AM, ready to tackle the trading day. The only pair catching my attention in the Asian session was AUDCHF. Typically, I’m not a huge fan of the Swiss franc due to its tight trading range, but today was different. I decided to engage in the business that needed doing. Normally, I use the Swiss franc as a safe haven indicator, but today, I chose to buy the Australian dollar against it.
ECO SNAP
My economic calculator, which aggregates various economic aspects of countries, rates them to provide a comprehensive outlook.
Comparison
Australia:
Economic Outlook Score: +1.33
Highlights: The Australian economy benefits from low unemployment, a strong trade balance, and positive consumer confidence. However, there are some concerns regarding inflation, which is slightly above the target.
Switzerland:
Economic Outlook Score: +1.44
Highlights: Switzerland's economy boasts very low unemployment, controlled inflation, a strong trade balance, and positive consumer confidence. These factors contribute to a marginally stronger economic outlook compared to Australia.
Combined Analysis:
The Swiss franc (CHF) has a slightly higher overall score (+1.44) compared to the Australian dollar (AUD) (+1.33), indicating a marginally stronger economic outlook for Switzerland. Both economies show low unemployment and stable economic indicators, but Switzerland benefits from better inflation control and a lower interest rate environment, which supports economic stability.
Strategy
Today's strategy is straightforward: get in and get out quickly.
Interest Rate Differentials: We have interest rate differentials working in our favor, which typically benefits such trades.
Timing: Since it's Monday, and swaps are charged on Wednesdays and Fridays, there is likely no support for us between now and then.
Given these considerations, I will capitalize on the favorable conditions and execute my trades efficiently to maximize potential returns while minimizing risks.