- The AUD/CHF initially rallied during the trading session on Friday, reaching the 50-Day EMA.
- Furthermore, we had reached the 0.64 level, a large, round, psychologically significant figure that has had an influence over the last several days.
- By pulling back the way we have, we ended up forming a bit of a shooting star, so therefore it makes a certain amount of sense that the market will continue to bounce around in this general vicinity, as we had formed a hammer during the previous session.
It’s probably worth noting that the market is grinding lower gradually, and therefore I think that’s how you will have to look at this market, one that you are looking to sell his short-term rallies, but you also recognize that we are not necessarily going to fall apart anytime soon. If we break down below the bottom of the hammer from the previous session, then it could open fresh selling, perhaps down to the 0.62 level, an area that has been important recently, as we had bounced from there.
Market Continues to See Downward Pressure
When you look at this chart, you should also look at and as a potential measure on risk appetite, as the Australian dollar is favored in times of risk-taking, while the Swiss franc of course is a safety currency. In other words, this shows the overall attitude of the market, and it also shows the fact that the market has been very choppy, even while dropping. Given enough time, I do think the sellers will continue to prevail, especially as the market has been dealing with a whole host of potential problems around the world when it comes to growth. Keep in mind the Australian dollar is highly levered to not only Asia, but commodities in general so it does make a lot of sense that it would continue to drift lower as industrial demand seems to be dropping everywhere.
On the other hand, if we were determined to take out the 0.65 level, then it’s possible we could get a bit of recovery to the 0.66 level, where the 200-Day EMA currently sits. That is a long-term trend-defining indicator, so of course, it is something worth paying attention to as a result. Ultimately, this is a market that continues to see downward pressure.
Ready to trade our Forex technical analysis? Here are the best Forex brokers to choose from.