AUD/CHF traded higher on Wednesday, after it hit support near the 0.6570 barrier, which is the lower bound of the sideways range that’s been containing the price action since December 21st. In our view, the rebound suggests that traders are willing to stay within that range for a while more and thus, we will maintain a flat stance for now.
In order to start examining whether the bears have gained the upper hand, we would like to see a clear dip below the 0.6570 zone. This will confirm a forthcoming lower low and could confirm the downside exit out of the range. We could then see declines towards the low of December 20th, at 0.6535, the break of which could allow extensions towards the 0.6497 level. If the bears are not willing to stop there either, we could see them overcoming that barrier and diving all the way down to the 0.6420 zone, near the low of December 3rd.
Taking a look at our short-term oscillators, we see that the RSI Just ticked above its 50 line, while the MACD, although negative, lies above its trigger line and points up as well. Both indicators suggest that some further recovery may be on the cards, within the aforementioned range, and add credence to our view of waiting for the exit.
Now, we will consider the outlook to have turned bullish if we see a break above the upper bound of the range, at 0.6674. This could signal the upside exit out of range and may initially target the 0.6708 barrier first, which provided support between November 19th and 25th. If the bulls are not willing to stop there, a break higher could extend the advance towards the peak of November 24th, at 0.6760.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68.02% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2022 JFD Group Ltd.