AUD/CHF has been in a sliding mode since July 19th, when it hit resistance near 0.6955. However, in the bigger picture, the rate has been trading in a sideways 100-pip range, between roughly that level and the 0.6855 territory. At the time of writing, it is trading near the lower end of the range, and thus, despite the latest slide we will stay flat for now.
We would like to see a decisive dip below 0.6855 before we start considering the bearish case, as something like that may confirm the downside exit out of the range and could initially pave the way towards the 0.6825 support hurdle, defined by the lows of June 27th and 28th. If the slide does not end there, then we may see extensions towards the 0.6810 zone, marked by the inside swing highs of June 21st and 25th.
Taking a look at our short-term oscillators, we see that the RSI hit its 30 line and rebounded somewhat, while the MACD, although below both its zero and trigger lines, shows signs that it could also start bottoming. These indicators suggest slowing downside speed and enhance our choice to remain neutral and wait for a dip below 0.6855 before we turn our eyes to the downside.
The rate could even bounce somewhat before, and if, the bears decide to take the reins, perhaps for a test near the key resistance zone of 0.6903, which lies in the middle of the range. That said, in order to get confident that the recovery could end up challenging the upper side of the range, we would like to see a clear break above that hurdle. Something like that may initially aim for the 0.6920 barrier, the break of which could set the stage for the 0.6945 level, or the range’s upper end, at around 0.6955.
