When looking at the daily chart for AUDCHF, there certainly appears to be signs of a bearish breakout building up for the pair. It’s more of a longer-term trend that looks set to grind the price lower during the upcoming sessions. However, in today’s Chart of The Day, we’ll concentrate on the four-hour time frame as its price action offers us more significant talking points.
Straight away, what stands out is this bearish channel that began towards the end of last month. Price action for AUDCHF is respecting both the channel support and resistance and reacting to weekly pivot levels marked in blue.
The most recent bounce up from 0.6371 continues the trend before finding substantial resistance around 0.6460 and settling at the weekly pivot of 0.6440. Should the pair attempt to move higher, there seems to be considerable resistance above 0.6500 as the price would converge with the top of the channel and the previous weekly pivot.
For a slightly different viewpoint, I’ve included the same chart below, only using the Ichimoku cloud indicator instead. Even this chart suggests a strong band of resistance above 0.65 due to the cloud’s thickness. And the past few candles are struggling to breach this area. Due to these observations, I suspect we may see a period of consolidation around 0.6440 before a quick re-test of lower levels again, such as 0.64 and 0.6350, respectively.
Note: Click on charts to enlarge.
By Adam Taylor CTEe
Sources: Go Markets, Meta Trader 5, TradingView, Bloomberg
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