The Reserve Bank of Australia (RBA) will kick off a week of central bank decisions, so you know we’ll be looking at AUD pairs!
Are you also seeing a consolidation that might put AUD/CHF in a better position for a short trade?
Before you check out the setup, make sure you know all of last week’s major market movers as well as this week’s potential market catalysts!
AUD/USD 1-hour Forex Chart by TradingView
AUD/CHF making higher lows since last week got me taking a closer look at the pair’s ascending triangle pattern on the 1-hour time frame.
A breakout above the .5930 resistance could lead to a 75ish-pip rally – equal to the height of the triangle’s base – and put AUD/CHF closer to the .6000 psychological handle.
As you can see, .6000 lines up with a support level from two weeks back AND the 61.8% Fibonacci retracement of last week’s downswing.
More importantly, .6000 is pretty close to a trend line resistance that hasn’t been broken since late January when AUD/CHF turned from the .6550 area.
Of course, it’s possible that AUD/CHF won’t hit .6000 in the next trading sessions. AUD will likely take cues from RBA’s policy decision scheduled on May 2 at 4:30 am GMT.
If the central bank pauses its rates and doesn’t signal enthusiasm to get back in the rate hike game, then traders will find it easier to sell AUD in case of risk aversion.
AUD/CHF could find resistance from its current levels and go back down to the .5880 area of interest.
But if there’s enough risk appetite to boost AUD for a while, then I’ll be looking at the .6000 psychological area for opportunities to jump on AUD/CHF’s longer-term downtrend.
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