We get a sense of alert today after AUDCHF rejecting channel resistance at 0.7266 on daily charts, currently hanging around one more resistance at 0.7210 levels (at the time of articulating).

These bearish swings have been a slant decline on both daily and monthly charts, the relevant resistance and support levels within this downward channel are properly correlated with the leading oscillators. So, we don't observe any considerable deviation whenever it hits the channel resistance and supports.

On CHF side, after the ECB eased by less than expected in early December, the SNB also held off from easing. It still lurks to do more if necessary but shows a reluctance to deliver on that threat - i.e. the SNB does not seem likely to cut rates further in an attempt to push EUR/CHF higher, rather it may use its remaining policy tools (further cuts and/or actual intervention) to prevent EUR/CHF from trading much lower.

On the flip side, over the longer-term, we expect AU growth to remain subpar and AUD to drift lower. There are a few key things to watch in 2016. Governor Stevens retires in Sept 2016 while a federal election must be held by Jan 2017.

AU's current account deficit is also worth tracking. While historically it has been easily financed thanks to Australia's high interest rates, it is back to 4.7%/GDP; FDI is slowing leaving Australia more reliant on portfolio flows.

In fact, while CAD has been hit on the latest leg down in oil, Australia's terms of trade are deteriorating almost as rapidly.

Expectations for the SNB also unwound after the ECB disappointment so when the unchanged decision came on December 10, it was much as expected.

With above fundamental and technical reasoning, use this strategy as AUD/CHF long term bearish environment holding stronger despite intermediate attempts of bulls taking over rallies and wish to earn capital gains.

Currency Hedging Framework:

AUD/CHF spot FX is currently trading at 0.7230. Buy 1M 1.5% out of the money -0.49 delta puts and simultaneously sell 1% out of the money calls with comparatively shorter expiry (probably 7, 10 or 15 days' time frame as suitable conditions).

Advantage: With this strategy, you use no capital or negligible capital and yet are able to simulate a short spot FX position, and the ability to leg in and leg out as you wish.

Risk/Reward Profile: The risk is uncapped if the pair rises towards north, while the reward equals lower strike plus net credit, or less net debit.