AUD/CHF continues to trade above an upside line
|AUD/CHF traded higher on Thursday, breaking above the 0.6748 barrier, marked by Wednesday’s high. Today, the pair traded in a consolidative manner, hitting 0.6780 and staying slightly below it. Overall, AUD/CHF is trading above a tentative upside support line taken from the low of October 29th, and thus, we would consider the near-term outlook to be positive for now.
A strong break above 0.6780 would confirm a forthcoming higher high and may extend the recovery towards the 0.6814 level, defined as a resistance by the high of December 31st, 2019. If that level is not able to stop the bulls, we may see the rate climbing higher, towards the 0.6840 area, marked by the high of December 12th, 2019.
Taking a look at our short-term oscillators though, we see signs of slowing upside speed. The RSI turned down after it hit its 70 line, while the MACD, although above both its zero and trigger lines, has also turned south. This means that the rate may correct lower before the bulls decide to take the reins again. A dip back below 0.6748 may confirm the case and perhaps target the 0.6717 barrier, or the aforementioned upside line.
However, in order to start examining a bearish reversal case, we would like to see a decisive dip below 0.6653, a support marked by the lows of December 15th and 21st. This would take the rate below the upside line and also confirm a forthcoming lower low. The bears may get encouraged to push the battle towards the 0.6597 zone, or the 0.6579 barrier, which is the low of December 8th. Another break, below 0.6579, may pave the way towards the low of November 9th, at 0.6542.
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