- AUD/CHF has formed a topping pattern on the hourly chart.
- The daily chart is in confluence with the reversion pattern.
AUD/CHF bears have stepped in following a rally that started on Friday, November 12. However, the Australian dollar has faced some fundamental headwinds in the last 24-hours or so which leaves it vulnerable to the downside.
Moreover, the Swiss franc is regarded as a perfect hedge against stagflation and the recent growth concerns in the eurozone could also give it an edge. This makes for a compelling case for a technical breakout in AUD/CHF to the downside and a meaningful correction that opens risk towards the mid-point of the 0.6700 area.
AUD/CHF daily chart
-637727021466331029.png)
The W-formation is a reversion pattern that would be expected to draw in the price towards at least a 38.2% Fibonacci retracement of the bullish impulse of the W. A break there opens prospects of a test all the way back to the neckline of the W-formation near 0.6750.
AUD/CHF H1 chart
-637727026197395066.png)
The hourly chart shows the price on the verge of a breakout below a head and shoulders formation, a topping pattern that would be expected to lead to a significant downside breakout. This would tie in nicely with the daily chart's reversion pattern's analysis for the sessions ahead.
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