The RBA will kick off a week of central bank decisions, so you know we’ll be looking at AUD pairs!
Do you also see a consolidation that might put AUD/CHF in a better position for a short position?
Before checking setup, make sure you know all the The most important market drivers last week So is this week potential market catalysts!
AUD/USD 1-hour chart by TradingView
AUD/CHF above the lows since last week made me take a closer look at the ascending triangle pattern of the pair on the 1-hour time frame.
A break above the 5930 resistance could lead to a 75 pips rise – equal to the height of the base of the triangle – and put AUD/CHF closer to the psychological handle of 0.6000.
As you can see, 0.6000 lines up with a support level from two weeks back and the 61.8% Fibonacci retracement of the bearish swing last week.
More importantly, 0.6000 is very close to trend line resistance that hasn’t been breached since late January when AUD/CHF turned around from 0.6550 area.
Of course, it is likely that AUD/CHF will not reach 0.6000 in the upcoming trading sessions. The Australian dollar is likely to take cues from the RBA’s policy decision due on May 2 at 4:30 AM GMT.
If the central bank pauses its rates and does not signal enthusiasm to return to the game of rate hikes, then traders will find it easier to short the Aussie on risk aversion.
AUD/CHF could find resistance from its current levels and return to the .5880 area of interest.
But if there is enough risk appetite to boost the Aussie for a while, I would look in the psychological 0.6000 area for opportunities to jump on the long-term downtrend of AUD/CHF.