AUD/CHF Price Analysis: Trading at overbought extremes

AUD/CHF Price Analysis: We look to be forming a topping pattern. Selling into mild rallies offers good reward against risk over the medium term

AUD/CHF Price Analysis                                 

Market highlights from the last week

Wednesday May 27: Reserve Bank of Australia Governor Lowe stated that the evidence so far is that the economic support package is working and again ruled out negative interest rates

Thursday May 28: The Swiss currency held steady on Friday with EUR/CHF around 1.0690 while USD/CHF retreated to three-week lows near 0.9625 before a marginal recovery.

Friday May 29: The May Swiss KOF business confidence index declined to a record low of 53.2 from 59.7 previously and well below consensus forecasts of 70.0 despite the gradual economic re-opening

Monday June 1: The firmer tone in risk appetite was a significant factor curbing underlying franc support during the day

Tuesday June 2: Australian GDP declined 0.3 per cent for the first quarter. The data helped underpin Australian dollar sentiment and the Chinese Caixin PMI data was also important in boosting confidence

AUD/CHF Price Analysis

Let us have a look at the technical viewpoint: 

Monthly: With risk off sentiment, AUDCHF traded to a low of 0.5342 in March. We have seen a recovery of 25.63 per cent to date. The cross has marginally broken through resistance in this time frame seen at 0.6607. A monthly close below this (0.6607)  is regarded to have “held”.  

Weekly: After four weeks of consolidation the cross pushed higher this week with risk on sentiment firm. 

Daily: We are seeing most of the overnight rally being sold into. A close around current levels and we will post an inverted hammer, often seen at the top of a trend. Is this the completion of a five-wave count? If so, we should see three large correction waves lower. 50 per cent pullback (from current levels) is located at 0.6033.

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Intraday 1-hour: Looks to be pushing lower towards the intraday 261.98% extension of 0.6575

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Outlook: We look to be forming a topping pattern. Selling into mild rallies offers good reward against risk over the medium term

Possible trade setup: 

Action: Selling rallies to 0.6660

Stop: 0.6720

Targets: short term 0.6570, medium term 0.6050

Potential return on risk to medium term target:  R10 (reward 610 / risk 60)

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Australian Dollar / Swiss Franc
Daily change
0.63835
Low: 0.6376
High: 0.6438
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