Dukascopy
Long

AUD/CHF 1H Chart: Channel Up

FOREXCOM:AUDCHF   Australian Dollar / Swiss Franc
The Australian Dollar             has shown some strength against the Swiss Franc             for the last three weeks, thus resulting in the formation of a channel up. The starting period of this pattern was rather chaotic; however, it managed to form two distinctive peaks within the last five trading days. The direction of the last wave down is to the side, resembling a minor falling wedge . Technical signals of both patterns therefore indicate that the rate should bounce off the 0.7545 area and breach the wedge to the upside. This level is likewise reinforced by the 55-hour SMA located at 0.7551. Immediate resistance, however, is provided by the monthly R2 at 0.7602. Meanwhile, trend indicators have substantially decreased in strength, suggesting that in case the surge upwards is to continue, it may no longer be sustainable for more than a few trading days.
Trade active: Due to recent developments and requests the Dukascopy Research Team has decided upon updating the outlook for the AUD/CHF currency pair. First of all it has to be noted that on Thursday a break out from the ascending channel pattern occurred, which caused the curiosity in the pair. It can be observed that the pair encountered a strong resistance level above the 0.7620 mark. That resistance forced the formation of a new descending channel pattern, which is headed at the moment to the support of the first monthly resistance level at the 0.7479 level. However, the currency pair has already begun a short term surge, as it has rebounded against the channel's lower trend line.
But if you think the trend is weakening and will last for only a few more trading days why is your prediction long i nstead of short?
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Dukascopy intergold
@intergold, The reason is trading ideas of Dukascopy are written daily for day traders. Usually we forecast for the next day or two.

Clues indicated that the wedge will be broken. It actually happened even faster than initially expected. As you can see on the chart today, it can be observed that the weakening did not hold out for long. It is a quite often sight that the dominant trend just takes over the junior pattern, and it can be forecasted by using and combining various methods.
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intergold Dukascopy
@Dukascopy_Analyst, thank you. So what's your prediction now? Short or long? Thanks!
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Dukascopy intergold
@intergold, The medium term surge seems to be not over, as it is still in the borders of the channel. However, if that trend line gets passed, a decline could begin. Rather unclear to just state it without really looking into it. At the moment nobody in our team thinks of reviewing this pair. We usually mix them up as we search for good opportunities to get in and out.
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Dukascopy intergold
@intergold, However, it seems that a short term triangle might pop up. Look at how the monthly level has provided resistance and the lower trend line in general. If that trend line keeps the pressure up, the rate will be squeezed in. That would result in a breakout.
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intergold Dukascopy
@Dukascopy_Analyst, thank you. I entered a basket of increasing sell trades a bit too early on this pair and now I'm really hoping for a decline to at least 0.75.
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Dukascopy intergold
@intergold, It could occur, if the pair breaks out to the downside. And...as I was writing this comment, it seems to be beginning a piercing of the support there. Watch the SMAs. Good luck with your trade! ;)
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Dukascopy intergold
@intergold, Congratulations! It did break out to the downside and reach the 0.75 mark. By the way, I am about to post an update of the situation,as you are interested in the rate.
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intergold Dukascopy
@Dukascopy_Analyst, thank you!
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