AUD/USD 4H Chart: Channel Down

AUD/CHF 1H Chart: Channel Down

Comment: AUD/CHF has recently broken through the support trend-line that has been guiding the currency pair since Oct 21. Accordingly, the outlook towards the Aussie is now negative, especially considering the emerging bearish channel. The price is expected to pierce through the 200-hour SMA and Nov 9 low and start an upward correction only in the region of 0.7030. The near-term gains are to be capped by the upper boundary of the pattern, but in case 0.71 is breached, the first target will be the violated trend-line at 0.7120, followed by the Nov 4 high and weekly R1 at 0.7170. As for the sentiment, three out of four SWFX traders are currently holding long positions.

AUD/USD 4H Chart: Channel Down

Comment: AUD/USD is presently forming a bearish channel. However, while we are more or less confident in the ability of the upper trend-line to contain rallies, especially considering that at the moment it is reinforced by the monthly PP and 200-period SMA, there are considerably less reasons to believe that the lower trend-line will be able to trigger a notable upward correction. Nevertheless, the base scenario is a short-term recovery from 0.7015 to 0.7170/50, after which a sell-off should ensue, although a close above 0.7170 will imply extension of the rally to the October high at 0.7380. In the meantime, the SWFX market is overbought to a great extent, being that 75% of open positions are long.

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