AUD/CHF is having difficulty choosing a direction after taking a break from its uptrend.
Is it because AUD/CHF traders are ready for a bearish reversal? Or can the Australian dollar bulls and franc bears extend the long-term trend?
This is the pattern I'm looking at on the daily time frame:
AUD/CHF Daily Forex Chart by TradingView
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If you have been monitoring the CHF pairs, you will know that the currency is struggling to find sustainable demand while the Swiss National Bank (SNB) remains relatively dovish versus its peers.
However, bouts of risk aversion have also boosted safe-haven appeal, pushing the Swiss franc higher against its “riskier” counterparts.
AUD/CHF, in particular, was pulled down from the 0.6085 R1 pivot point line all the way to the S1 pivot point levels (0.5926). As you can see, the current levels of the AUD/CHF pair are also not far from the 100 SMA on the daily chart as well as the support of the bullish channel that has been in place since February.
Will AUD/CHF extend its uptrend?
Candles rising from the support area increase the possibility of a return to the psychological level of 0.6000 if not the previous high of 0.6085.
On the other hand, an extension of the downtrend in the AUD/CHF pair exposes the pair to a downward breakout.
A clear breakout, combined with red candles and bearish momentum, could push AUD/CHF to lower inflection points such as the S2 pivot point (.5856) or the previous area of interest at 0.5800.
what do you think? Where will the AUD/CHF go next?