AUD/CHF traded higher during the Asian trading Friday, breaking above 0.6600, the upper bound of a sideways range that contained most of the price action since July 23rd. In our view, the upside exit of the range has turned the short-term outlook to a positive one.
The pair has pulled back twice today, to test the range’s upper bound as a support this time. Even if we see another retreat though, as long as the rate continues to balance above 0.6600, we will still see decent chances for the bulls to push higher and perhaps overcome the 0.6627 resistance, marked by the inside swing low of July 22nd. This may open the path towards the peak of the day after, at around 0.6647, the break of which may carry larger bullish implications, perhaps setting the stage for advances towards the high of July 22nd, at around 0.6687.
Turning our gaze to our short-term oscillators, we see that the RSI stands above 70, while the MACD lies above both its zero and trigger lines. Both indicators detect strong upside speed and support the notion for more near-term upside extensions in this exchange rate.
In order to abandon the bullish case and turn back flat, we would like to see a strong retreat back below 0.6575. This would confirm the rate’s return within the aforementioned range, and may allow some declines within that range. The next support is defined by the inside swing highs of August 21st and 24th, at around 0.6550, which if broken, may see scope for more bearish extensions, perhaps towards the lower end of the range, at around 0.6500.