AUD/CHF Weakness Signals Bearish Targets Amid Swiss Franc Strength
Monday Market Overview:
On Monday, the Swiss franc demonstrated one of the strongest performances among major currencies following unexpected election results in France. Despite a recovery in the euro during the European morning session, the franc strengthened against the US dollar for the second consecutive week. Meanwhile, the Australian dollar hit a six-month high against the US dollar but remained behind its Swiss counterpart in a quiet economic calendar.
Technical Analysis:
The bearish sentiment towards AUD/CHF is evident on the four-hour chart, where the pair is trading below the 34-period moving average. The break below the previous low at 0.60358 has turned the outlook for AUD/CHF bearish. Continued downward momentum below this breached support could see the price revisiting the support zone between 0.60315 and 0.60260. If sellers manage to push beyond this critical support, the next target would be 0.60102.
Alternative Scenario:
For buyers to delay the bearish scenario, they need to reclaim the 34-period moving average and break above the resistance at 0.60418. The bullish scenario will only come into play if buyers manage to push the price above the 0.60516 level.
Key Levels:
Resistance Levels:
- Resistance 3: 0.60516
- Resistance 2: 0.60418
- Resistance 1: 0.60358
Current Price (at the time of analysis): 0.60336
Support Levels:
- Support 1: 0.60315
- Support 2: 0.60260
- Support 3: 0.60200
- Support 4: 0.60102
Impactful Events:
After a decline in monthly home loans in Australia, announced during the Asian session, the focus will shift to Australia’s housing market report and building permits due on Wednesday. These reports will provide better insights into consumer strength in Australia’s significant housing market.
Oscillators and Risk Warnings:
RSI (Relative Strength Index): Neutral, indicating balanced market conditions.
MACD (Moving Average Convergence Divergence): Neutral, suggesting no strong momentum.
Moving Averages: Mixed, reflecting the current uncertainty in price direction.
Conclusion:
AUD/CHF is under significant pressure as the Swiss franc gains strength following unexpected French election results and continued support from its safe-haven status. The break below key support at 0.60358 signals further potential declines, with targets at 0.60315, 0.60260, and 0.60102 if bearish momentum persists. However, a break above the 34-period moving average and resistance at 0.60418 would be necessary to delay the bearish outlook, with a more significant reversal requiring a move above 0.60516.
Investors should closely monitor upcoming Australian housing data for insights into consumer strength and potential impacts on the Australian dollar, while the broader market dynamics will continue to be influenced by geopolitical developments and central bank policies.
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