AUD/CHF Looks To Complete An Inverted Head And Shoulders Pattern
JFD Team | Oct 08, 2021 07:36AM ET
AUD/CHF moved higher yesterday, confirming the break above the downside resistance line taken from the high of Mar. 18. The pair is on the verge of forming an inverted Head and Shoulders formation.
With that in mind, despite the break above the upside line, we prefer to wait to complete the reversal pattern before we start examining a potential positive reversal.
A clear break above 0.6865 may confirm the break above the pattern’s neckline, leading to a trend reversal. This could pave the way towards 0.6973, which was a resistance between May 25 and July 6.
After crossing the resistance, the pair could head towards the peak of May 18, at 0.7030. If the bulls are not willing to stop there either, we could see them targeting the high of May 10, at 0.7100.
Shifting attention to our daily oscillators, we see that the RSI lies above its 50 line, but it has just ticked down, while the MACD remains above both its zero and trigger lines, still pointing up.
Both indicators detect positive momentum, but the fact that the RSI ticked down adds credence to our view of waiting for the completion of the inverted head and shoulders.
On the downside, a dip back below 0.6660, marked by the low of Sept. 21, may signal the resumption of the latest downtrend and could pave the way towards the low of Aug. 20, near 0.6515.
Another break below 0.6515 could see scope for more declines, perhaps towards the 0.6400 territories, marked by the low of Oct. 29, 2020.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.