AUD/CHF Sellers Target Lower Levels Amid Swiss Franc Stability
Market Overview
The Australian dollar (AUD) remains under pressure following the latest inflation data from Australia, which reinforced market expectations of interest rate cuts by the Reserve Bank of Australia (RBA). The quarterly inflation rate held steady at 0.2%, while the annual inflation figure slowed to 2.4%, falling short of forecasts. These numbers suggest that inflationary pressures are easing, increasing the likelihood of monetary policy easing in the coming months.
Meanwhile, the Swiss franc (CHF) has retained its safe-haven appeal, maintaining a relatively stable position against Asian currencies, including the Australian dollar. In an environment of heightened uncertainty, the franc remains resilient, supported by global risk aversion and expectations that the Swiss National Bank (SNB) will maintain its cautious stance.
Technical Analysis
The AUD/CHF pair, trading on the four-hour timeframe, has entered a clear downtrend following the breakdown of its ascending trendline. The price is currently trading below both the 100-period and 20-period moving averages, reinforcing a bearish outlook.
Sellers have successfully pushed the pair below the key support level of 0.56470, confirming further downside potential. If selling pressure persists and AUD/CHF breaks below the immediate support at 0.56387, the next targets are set at 0.56281 and 0.56164.
Momentum indicators further validate the bearish scenario. The RSI remains in negative territory, signaling increasing selling momentum, while the MACD, though showing signs of consolidation, remains in the bearish zone, suggesting that downward pressure is still dominant.
On the upside, buyers would need to reclaim 0.56776 to invalidate the current downtrend. A sustained move above this level would shift market sentiment and could trigger a potential reversal.
Key Technical Levels
- Resistance Levels: 0.56470, 0.56587, 0.56776
- Support Levels: 0.56387, 0.56281, 0.56164
Fundamental Factors
From a macroeconomic perspective, the AUD remains weak as lower inflation expectations have strengthened the case for a potential RBA rate cut. Traders will closely monitor upcoming RBA policy signals to gauge whether further downside risks exist.
In Switzerland, investor focus shifts to Thursday’s trade balance report, which could provide further insight into the strength of Swiss exports. A strong trade surplus would reinforce CHF stability, adding to the bearish bias for AUD/CHF.
Conclusion
The AUD/CHF downtrend remains intact, with sellers maintaining control as long as price action stays below 0.56470. A break below 0.56387 could lead to further downside pressure, while a reversal above 0.56776 would invalidate the bearish outlook.
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