(Melina Deltas, CFTe – XM)
AUD/USD dives near fresh 6-week low
AUDUSD is plunging towards a new six-week low at 0.6790, penetrating the symmetrical triangle to the downside. This break is a sign of more losses in the market, confirmed by the technical indicators as well. The MACD is falling below its trigger and zero lines, while the RSI is sloping downwards in the negative region.
Should weakness extend below the intraday’s low, support to downside movement could initially be detected near the 26-month trough of 0.6680. Clearing that zone, the next stop could be around 0.6570, a tested level in May 2020.
Alternatively, the pair needs to overcome the 0.6855 line to meet a key barrier between the 40- and the 20-day simple moving averages (SMAs) at 0.6915-0.6945. The 0.7010 mark could act as resistance too before a more important battle starts near the 200-day SMA, which overlaps with the 0.7135 barrier.
In the medium-term picture, the sentiment is currently bearish after the price declined below the symmetrical triangle. Otherwise, a jump beyond the 200-day SMA may switch the outlook to positive.
USD/CHF rally may not be over yet
USDCHF was flirting with the 0.9800 level during the early European trading hours, the highest since mid-July as trading for September began ahead of Friday’s US nonfarm payroll report.
The pair is set for its third consecutive week of gains, but the downtrend in the medium-term picture is still valid, defended by the clear series of lower highs and lower lows off the three-year high of 1.0063 registered in May. Despite that, the momentum indicators are optimistic that the bulls may still have some fuel in the tank. Specifically, the RSI has yet to touch its 70 overbought mark, while the stochastics look to re-enter the overbought area above 80. The strength in the MACD is backing this view as well.
On the upside, the 0.9800 – 0.9840 zone, which encapsulates the 61.8% Fibonacci of the latest downleg, could be the key for an acceleration towards the 0.9935 handle. Beyond that, buyers will aim for parity, bringing the top of 1.0063 back under scope.
In the bearish scenario, where the rally halts around 0.9800, the 50% Fibonacci of 0.9716 could buffer any selling pressures. If it fails to do so, the decline may stretch towards the 38.2% Fibonacci of 0.9634, while lower, some consolidation may emerge near the swing low of 0.9576 before the 23.6% Fibonacci of 0.9533 appears on the radar.
Summarizing, USDCHF seems to have some room for improvement in the short-term picture, though whether the pair will manage to reverse its medium-term downtrend above July’s peak of 0.9884 remains to be seen.