Australian dollar bouncing from major support against Swiss fran
For most of the year, the Australian dollar has been bouncing around against the Swiss franc in a roughly 300 point range. As you can see on the chart, the 0.70 level has been rather supportive, while the 0.73 level above has been rather resistant. It looks as if we have 75 pips of support and resistance right around these big figures, as the noted on the chart as well.
Looking at the candle stick from the Monday session you can see that we reach down towards the 0.7075 handle, which is the beginning of that massive support level. By turning around and bouncing the way we have, it suggests many different things. The most obvious and initial thing is that perhaps we will try to go back towards the highs of the range, so therefore it makes it an attractive long. But beyond that, the Australian dollar bouncing against the Swiss franc suggests that perhaps risk appetite will be coming back into the marketplace, giving us an opportunity to not only pick up the Australian dollar, but also other markets such as gold and perhaps even stock markets.
If we were to break down below the support level and sliced through the 0.70 level, then obviously this would become a market that should be very negative suddenly, and it would probably have a bit of a “knock on effect” of negativity in many of the other global markets as well. This would be because money would be flowing towards safety in the form of the Swiss financial system.
There is the 200 day EMA above, but that has been sliced through several times, so it’s very unlikely that we are going to struggle with that area, as traders aren’t necessarily paying a lot of attention to it in the short term. All things being equal, this probably more risk to the upside then down.
Looking at the candle stick from the Monday session you can see that we reach down towards the 0.7075 handle, which is the beginning of that massive support level. By turning around and bouncing the way we have, it suggests many different things. The most obvious and initial thing is that perhaps we will try to go back towards the highs of the range, so therefore it makes it an attractive long. But beyond that, the Australian dollar bouncing against the Swiss franc suggests that perhaps risk appetite will be coming back into the marketplace, giving us an opportunity to not only pick up the Australian dollar, but also other markets such as gold and perhaps even stock markets.
If we were to break down below the support level and sliced through the 0.70 level, then obviously this would become a market that should be very negative suddenly, and it would probably have a bit of a “knock on effect” of negativity in many of the other global markets as well. This would be because money would be flowing towards safety in the form of the Swiss financial system.
There is the 200 day EMA above, but that has been sliced through several times, so it’s very unlikely that we are going to struggle with that area, as traders aren’t necessarily paying a lot of attention to it in the short term. All things being equal, this probably more risk to the upside then down.