AUD/CHF 4H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Since the last time we looked at AUD/CHF, the pair has confirmed the lower boundary of the channel and has approached the upper trend-line. Accordingly, we now expect the Aussie to turn around and start a new bearish leg. Although there are not many arguments in favour of a sell-off apart from the pattern itself and the fact that the currency is overbought (71% of positions are long), the risks are skewed to the downside. The rate should soon bounce off of 0.7150 and then descend past this month's low at 0.68. Meanwhile, above 0.7150 the target will be a wide but formidable supply area between 0.7350 and 0.7300, created by the monthly PP and Dec 31 high.
© Dukascopy Bank SA
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