Today I am shorting AUDCHF. Current price is .9815. I have my stop set at .9956 and my limit at .9595. This trade is based on a set of momentum and Elliott Wave indicators I have developed over the past 5 years.
As a new member here, I am unable to post links to charts explaining this trade in more detail; however, you can visit my profile for the specifics on this trade.
Concisely, this pair seems heavily overbought on the 15-minute all the way out to the 8-hour chart and, from an Elliott Wave perspective, appears to have just completed 5 waves up. Therefore I am looking for a minimum of a 2% net correction.
Interesting stuff, I have been looking at this Pair. However, I decided I didn’t want to be short AUD against anything, at the moment, so I stayed out - I’m now eying the 1.0160 level, it’s years since that has been breaced. A Short from there could give a great R:R…
Thanks for your perspective, Simon. On the long-term charts I can also see price going as high as 1.0150-1.0250 in the coming weeks. Very long term, over the next decade, I think this pair has a good chance of getting over 1.15 and back into territory not seen since the 90s.
Here is a weekly chart showing how the movements of the past twenty years look like a bunch of 3-wave affairs grinding this pair to a bottom:
I can see support around .8900 to .9000, where there is also the .382 Fibonacci retracement level off the August 2011 low. Ideally, I’d like to see a re-test of the August low followed by a clean five waves up to signal a long-term bear market has begun… but it may not be that clean.
Here is a daily chart, which sees the movement off the August 2011 low as an A-B-C correction. We are very close to the level where A=C, which tends to agree with the momentum indicators that a bearish turn of several hundred pips is near:
And finally, here is a 4-hour chart that examines the market action since May in detail. What strikes me most about this advance is that it doesn’t look very impulsive, even though the movement has been almost straight up. It looks much more like a C wave, being split in the middle by the pennant of June 18-22, which I count as Wave B.
The sum total of all this is that the bulls seem pretty exhausted at this point, and when price does turn downward, we can safely short targeting at least a .236 retracement of the whole advance since August 2011 down to .9350, with a secondary target down at the .382 retracement level of .8920. This is the kind of trade that can make one’s year.
The price action from the latter half of last week has allowed me to attempt to map out the upcoming decline in audchf in more detail. It may well be a slower, more shallow decline than I was expecting last week, but it still ought to carry below .9600 in the coming weeks.
Friday’s rally, while it retraced nearly all of the sharp decline, was nonetheless corrective in wave form and thus I expect price to hit new lows this week.
Nice chart!!! I like your analysis. Im too looking to short from 1.0150. but my way of read the chart very simple. Most of time i use only horizontal S/R line with candlestick pattern. though the 1.0150 is very very strong resistance but if look at weekly chart; last few weeks strong bull candle showing that it could break that resistance line.
However, If any weekly candle close above 1.0150 then we could see more gear up this bull market. If price could break that strong 1.0150 resistance then price might hit next key resistance at 1.0750 On other hand, if any high probability candle pattern (Like Pin Bar) formed at 1.0150 area then it must be the high profitable trade for sellers.
I was stopped out of this trade (twice) but now that price is near that long-term resistance at 1.0150, I’ve re-entered the short trade at today’s price of 1.0133. Momentum is looking bearish on nearly every time frame and USDCHF looks like it may soon break firmly under .9700. As I’m also looking for AUDUSD to fall below .9750 over the next couple months, it makes sense from my perspective on things to be short AUDCHF.
My new stop is at 1.0305 and I’m targeting .9614, the area labeled as Wave B above which acted as a jumping-off point for the second half of the advance since mid-May.
What I see is that momentum is increasing or at least holding to the upside…
Although I am a technical trader, there is a huge fundamental reason for the A/C bullishness. With the floor imposed by the SNB and the good reports from Australia, the “safe” trades are the EUR/AUD short and the AUD/CHF long. The Euro is being use heavily as a funding currency since its weakness and low rates. So Banks and Sovereigns searching for yields are buying the AUD like crazy… of course there will be a correction but I think is better to wait in order to enter a short trade in the AUD/CHF… I am guessing the catalyst could be some bad numbers coming out from Down Under…
I agree with all of that, Yunny, as ever - but as there is some RSI divergence on the Daily, plus Price has just hit and (so far briefly) stalled around my 1.0160 level, so I am still belligerently interested to see whether it gives me a shorting opportunity later on today. Given all the underlying bullish factors, though, I won’t look for an intraday Entry - I’ll simply wait to see how today’s Daily bar closes and take it from there.
Nice to have a thread on a Pair like this, for once!!
Since the peg is still in place I think that it is EURAUD which will or will not give any clues for a reversal. The fact that AUDCHF has reached previous resistance means nothing under the current circumstances.
I agree that it means less than it did pre-SNB floor - it’s not really a peg, more an indication of a Price they will defend, if I understand them correctly? - but Price still reacts to psychological levels, even on this market, particularly on the higher timeframes, so with money management in place it could be worth 1% of my account (depending on how things play out today), as it will drop at some point and give a good R:R. But I take your point.
I agree with yunny of this pair, it is hard to short this pair when all u can see is bullish bars only forming, I thought that after the unemployment report in the aussie came out bad that the aussie would start to begin to be weak agian, but after a day after the report the aussie started to be bullish agian and started to rise (this is because of the Euro, exactly what yunny said). So even thou all technical indicators point towards bearish IMHO it will still be going up for the time being. Until the AU will finally start dropping, then a good Aud/CHF short can be made (that is what I am waiting for). So my advice is don’t try to be a sniper, instead wait for it too start dropping good before entering.
What Macro Funds and Sovereigns are doing is simple, they need to decrease their Euro holdings, so they go to the best place they can sell… that is the SNB floor, there is where the Euro is overvalued artificially… so the trade is to sell Euros and buy CHF… but they don’t want to hold to many CHF… they need yields… the result is they go and buy AUD and sell CHF which is the “safe haven” currency for now with the best interest rates differential…
Obviously I agree with you - but trading just boils down to watching levels, and I find over time that for end of day trades it pays to trade what I see rather than what I think. So while fundamentally I agree with you, from a chart analysis point of view I will still take short setups that I see in these current, overextended waters. I spend most of my time stalking setups, very little time actually taking trades!
The most successful systems I have designed are counter-trend. They yield the maximum amount of pips/month when tested in the last 10 years, and they are profitable every year even though they have losing months. Unfortunately they have huge drawdowns and require big stoplosses and that’s why I don’t trade them myself. In any case, they show it’s time to go short in AUDCHF. If I didn’t care about stoploss and drawdown, I’d enter now with stoploss no less than 500 pips
Last week The AUD/CHF has broken its major resistance at about 1.0150 and closed at 1.0246. This is very strong resistance; before last week The AUD/CHF market retrace this level last May’2010. and price several time tested this resistance level. But after 5 years last week it has broken and close above that resistance.
This week, price pull back that resistance (now turned support) and quickly beck from that level.
Now have a look on Daily chart On daily chart we see that there has formed a fakey pin Bar setup that also retrace from the dynamic sup/res 21EMA. It seems that the bullish momentum is still intact on the market. We expect that this bull momentum will continue. We don’t see any logical resistance before 1.0700
Sorry about that, Guvvy - for my part, once we broke the 1.0160 or so Resistance and closed above it, my bias became long. I did not trade it - Daily PA was a little scruffy for me - but that was the level that I was watching. I obviously never got a setup for my short idea, then that Resistance broke and for me it was a case of move on and look for a long. As a previous poster said, there is plenty of clear air north of here - I think the next old level I have on my chart is 1.0760 or so.
