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AUD/CHF price analysis: rejects the 61.8 per cent Fibonacci

By Alpha Analysis

AUD/CHF price analysis: with the rejection at 61.8 per cent and the Ending Wedge pattern, the outlook is bearish. We look for limited rallies

AUD/CHF price analysis

Market highlights from the past week

Friday July 10: risk conditions eventually strengthened on Friday despite unease over US coronavirus cases with a favourable trial report for the the drug remdesivir boosting sentiment

Monday July 13: risk conditions also held firm for most of Monday before dipping as the imposition of fresh lockdown measures in California helped trigger a slide in confidence

Tuesday July 14: Swiss National Bank chair Jordan reiterated that forex interventions are the most effective instrument to curb the Swiss franc

Wednesday July 15: risk appetite held firm on Wednesday with expectations of progress towards developing a coronavirus vaccine providing support

Thursday July 16: there was caution ahead of Friday’s EU Summit meeting with increasing pressure for recovery-fund agreement

AUD/CHF: a great cross to play short for risk off. We have a high yielding currency (AUD) by a safe haven (CHF)

AUD/CHF price analysis

Let us have a look at the technical viewpoint: 

Monthly: with risk off sentiment, AUD/CHF traded to a low of 0.5342 in March. We have seen a recovery of 26.24 per cent to date. Monthly resistance is seen at 0.6593

Weekly: we have seen mixed trading for the last five weeks. Posted indecisive Inside Soldiers

Daily: we can note a five-wave pattern to the upside. From an Elliott Wave perspective, we should now be in the corrective three-wave pattern lower. We have a 50 per cent pullback level at 0.6037 (from 0.5342-0.6740). Previous swing low is located at 0.6065. 

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Intraday four-hour: levels close to the 61.8 per cent Fibonacci have found sellers. This could also be seen as an Ending Wedge pattern. A break of support at 0.6520 and the measured move target is 0.6424

A picture containing monitor, television, screen, videoDescription automatically generatedOutlook: with the rejection at 61.8 per cent and the Ending Wedge pattern, the outlook is bearish. We look for limited rallies 

Possible trade set-up: 

Action: selling at the market (0.6576)

Stop: 0.6636 (above 61.8)

Target: 0.6065 (medium-term support)

Potential return on risk to first target:  R8.5 (reward 511/risk 60)

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Australian Dollar / Swiss Franc
Daily change
Low: 0.6557
High: 0.6577