AUD/CHF trades within an upside channel

AUD/CHF traded in a consolidative manner during the European morning Monday, staying fractionally below the 0.6150 area. Overall, the rate has been trading within an upside channel since March 19^th, and thus, we would consider the near-term outlook to be positive.

A clear break above 0.6150 may target the 0.6220 zone, marked by the lows of February 2^nd and March 2^nd, or the upper bound of the channel. The bulls may decide to take a small break thereafter, thereby allowing the rate to correct lower, perhaps to challenge the 0.6025 support, or the lower end of the channel. That said, as long as the pair would be still trading within the channel, we would see decent chances for the bulls to jump back into the game and aim for areas above the 0.6220 barrier. They may put the channel’s upper bound back on their radars, or the 0.6350 territory, marked by the highs of March 4^th and 5^th.

Shifting attention to our short-term oscillators, we see that the RSI lies slightly below 70 and has turned back up, but the MACD, although well into positive grounds, stands below its trigger line and points south. Both indicators detect upside speed, but the topping of the MACD supports the notion for a pullback, at least within the channel, soon. Perhaps after the rate challenges the 0.6220 level, or the upper end of the channel.

On the downside, we would like to see a decisive dip below 0.5950 before we start examining whether the bulls have dropped their weapons. Such a move may confirm the downside exit out of the channel and could initially allow declines towards the 0.5835 territory, which provided decent support between March 29^th and April 3^rd. Another break, below 0.5835, could extend the slide towards the lows of March 24^th and 26^th, at 0.5725.

JFDBANK.com - One-stop Multi-asset Experience for Trading and Investment Services