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Chart Art: AUD/CHF Downtrend Bounce to Resistance?

October 17, 2023| Forex Market

We may see strong moves ahead from the Aussie with the latest employment situation update coming from Australia.

Could that bring the bears back into the AUD/CHF downtrend? Or is there potential for the bulls to break the strong technical area of interest?

AUD/CHF 1-Hour Forex Chart by TradingView

AUD/CHF 1-Hour Forex Chart by TradingView

What’s up Aussie traders! The forex calendar is showing us that volatility may pick up for Aussie pairs this week with the latest Australian jobs update hitting the wires on Thursday.

Whether or not that will bring the bulls or bears out remains to be seen, and if you’re looking to up your chances on anticipating the moves ahead, check out our latest Event Guide covering the September jobs event.

After doing your homework and picking your directional bias, if you’re leaning with the current trend lower, then the confluence of several technical arguments around the minor psychological level of 0.5750 is the area to watch.

There we can see falling moving averages lining up with the Fibonacci retracement area, and on top of that, we also see a bearish divergence pattern between the rising “highs” in price and falling “highs” on the stochastic indicator.

All put together, the odds of technical trader placing orders there to play the downtrend is elevated, upping the odds of that area holding as resistance. And if bearish reversal patterns play out, then the odds rise even more of the trend holding as more technical traders may begin to start operating in that area.

Of course, we’ve gotta look at the long side too as anything can happen with the fundies, especially with the Australian jobs update (which does often surprise relative to expectations) and a fluid geopolitical environment that we’re currently seeing drive broad market sentiment.

If for some reason the bulls take control, and are able to push the market above the technical confluence area and sustain the market there, that raises the odds of technical traders lightening up on short further, either taking profit or reversing positions.

In that scenario, be on the look out for break-retest-bullish reversal setups as those tend to confirm the new bullish trend, or any kind of risk management style or strategy that suits your particular circumstances and risk tolerances.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.

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