So the Reserve Bank of Australia (RBA) raised interest rates.
While Governor Lowe and his team realized that inflation had passed its peak, they felt 7% was still too high. They raised the RBA interest rate by another 25 basis points to 4.10% and repeated it.”Further tightening of monetary policy may be needed to help return inflation to RBA targets.“
With many traders having at least some estimation that the RBA will keep its rates steady, the “surprise” rate hike sent the Australian dollar higher against its peers.
AUD/CHF, in particular, jumped out of its ranges near the 0.6000 psychological handle to trade near 0.6040.
But the Australian dollar is having trouble extending its gains. One possible reason is that the Aussie bulls have not breached the 6050 resistance level since mid-April.
Just check out the 4-hour chart below!
AUD/CHF for 4 hours Planned by TV
Coincidentally, today’s highs also correspond to S2 (.6040) of today’s standard pivot points on the 15-minute time frame.
Will this lead to a decline in AUD/CHF after a sharp rally?
AUD/CHF 15-Minute Forex Planned by TV
A closer look at the 15-minute chart shows that the area of 0.6000 – .6010 is a very congested area that could attract a new round of buyers.
Not only does the area line up with this week’s range, it is also near the 100 and 200 SMAs, trend line support, and the pivot point level near 0.6000.
A pullback to 0.6000 – .6010 could set the Aussie bulls for a nice entry in case AUD/CHF extends its June bullish run.
AUD/CHF buyers can target the resistance .6040 – .6050 with stop-loss orders placed just below the trendline support.
RBA Governor Lowe is scheduled to deliver a speech later today and Australia will print GDP data in the upcoming Asian trading session.
If these events reinforce the RBA’s hawkish decision, AUD/CHF could see new monthly highs.
Good luck and be sure to watch Average daily volatility for the AUD/CHF pair So you know where to place your entry and exit targets!
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