The Australian dollar has pulled back down against the Swiss franc yet again, but as you can see on the chart there are couple of different levels that I have marked clearly on the chart. The 0.69 level extends to the 0.70 level as a support area, and we have bounced from here several times, not only in the recent history but also back in the past. With that in mind, it obviously is an area that is a bit of a “buy zone.”
That being said, if we can break above the 0.70 level, it’s very likely that we will jump right back into that consolidation area that extends to the 0.7250 level. That gives us plenty of room to trade, and I think at this point it’s likely that we will see a surge higher at that point.
One of the things that you need to keep in mind is that this pair is highly sensitive to risk appetite and therefore a bounce from here isn’t necessarily guaranteed. We are seeing a bit of Swiss franc softness around the Forex world, so that could also help. However, the Australian dollar is considered “risky”, while the Swiss franc is considered to be “safe.” It’s going to be able to tell whether or not the market is going to break one way or the other, but clearly if we can get above the 0.70 level, it would be assigned that we have busted through quite a bit of questions.
To the downside, if we break down below the 0.68 handle, it’s very likely that we will go looking towards the bottom of that extreme hammer from the beginning of the year, which could send this market closer to the 0.66 level. Keep in mind that this is the weekly chart, but this is of course where we try to make our longer-term decisions.