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AUD/CHF price analysis: poor NFP could drive this cross lower

AUD/CHF price analysis: With the AB=CD formation deemed as complete, this offers a solid reward and risk trade for a further move to the downside.

Market highlights from the past week

Friday, May 1: Risk appetite was more vulnerable on Friday as global trade fears persisted.

Monday, May 4: Risk conditions remained a significant element on Monday with greater caution continuing to underpin the Swiss currency on defensive grounds.

Tuesday, May 5: March retail sales data was slightly stronger than expected, but the Australian currency was unable to make further headway and settled around 0.6445.

Wednesday, May 6: The franc was little changed with no further deterioration in risk appetite and USD/CHF consolidated around 0.9750 as April unemployment increased to 3.3 per cent from 2.8 per cent previously.

Thursday, May 7: Commodity currencies were resilient and secured net gains on Thursday.

AUD/CHF price analysis

Let us have a look at the technical viewpoint.

Monthly: Traded to multiyear lows of 0.5342 in March as traders ran to buy the safe haven Swiss franc (selling 0'>AUD/CHF ). We have seen a recovery of 19.86 per cent from the base to the April 30 peak.

Weekly: All last week’s initial rally was sold into. This left an inverted hammer on the weekly chart, a negative candle for sentiment.

Daily: The move higher can be seen in five waves (Elliott wave). This would suggest that we are now in the corrective ABC move to the downside. We posted a bearish outside bar on April 30. This candle often indicates the end of a trend and the start of a new downward bias. Support is seen at 0.5950.

Intraday four-hour: An AB=CD corrective formation looks to target 0.6364. We have made a 0.6361 overnight.

Outlook: With non-farm payroll due today, are we going to see risk off again? This pair/cross would favour a poor reading. With the AB=CD formation deemed as complete, this offers a solid reward and risk trade for a further move to the downside.

Possible trade setup

Action: Selling at the market (currently 0.6333)

Stop: 0.6400

Targets: 0.5950 (long-term target)

Potential return on risk to first target: R5.7 (reward 383 / risk 67)

Australian Dollar / Swiss Franc
Daily change
0.6331
Low: 0.6327
High: 0.63755

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