The AUD/CHF daily chart is giving us an interesting question at the moment. Is the current price action showing us a Bullish Flag, or a Bearish ‘W’? The pair is sitting on support at 0.8588 and has held above this zone for almost 2 weeks now, but can’t seem to move very far either way at the moment. I for one think that a bullish breakout is possible, but the CHF itself is looking rather strong after the US Fed’s decision to hold off on tapering for now.
As a result, wither the AUD is going to have to stage a major recovery to make this pair climb, or the CHF is going to break 0.9100 and continue to strengthen to the point that it will over-ride any strength the AUD can muster. If it can climb away from its current cap at 0.8709 and the 38.2% FIBO at 0.8860 from March’s high to August’s low, there is a good possibility of the pair will hit at least 0.9000 with the 50% FIBO waiting at 0.9075. To the downside however, we only have support in minor amounts, at 0.8450, 0.8350 and 0.8250. If the 2 year low at 0.8174 gives way, this pair could free fall to the 2011 low at 0.7143...but we will have to wait to see which way the pair favors over the next few days to have a better idea.
