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With global risk sentiment on the upswing and no visible major economic catalysts ahead, this textbook resistance setup is one to watch on AUD/CHF.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12968.53 +0.57%
FTSE: 7332.42 +0.11%
S&P 500: 3040.80 0.60%
DJIA: 27123.46 +0.61%
US 10-yr 1.854% +0.053
Bund 10-YR -0.328% +0.047
UK 10-YR: 0.70% +0.02
JPN 10-YR: -0.137% +0.017
Oil: 53.93 +1.16%
Gold: 1488.40 +0.02%
Bitcoin: 93.72.71 -1.99%
Etherium: 183.38 -0.47%

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • U.K. PMs Vote on Election call at 5:00 pm GMT
  • Japan Tokyo CPI at 11:30 pm GMT
  • RBA Governor Lowe at 6:45 am GMT (Oct. 29)
  • U.K. Housing prices at 7:00 am GMT (Oct. 29)
  • U.K. Mortgage approvals, Consumer credit at 9:30 am GMT (Oct. 29)
  • U.S. S&P/Case-Shiller home prices at 1:00 pm GMT (Oct. 29)
  • U.S. Pending home sales & consumer confidence at 2:00 pm GMT (Oct. 29)

What to Watch: AUD/CHF

 AUD/CHF 1-Hour Forex Chart
AUD/CHF 1-Hour Forex Chart

With not a lot of potentially market-moving economic catalysts ahead, we’re keeping it simple to start the week with this textbook setup on AUD/CHF. It looks like a risk-on kinda day with positive news coming from the geopolitical fronts, most notably the hopes of getting close to a China-U.S. trade deal pushing up equities and bond yields, while the yen and Swiss franc suffer on the session. Let’s roll with that sentiment on AUD/CHF as it seems to be breaking a strong area of interest.

On the one hour chart above of AUD/CHF, we can see a rising triangle formation in the works with rising ‘lows’ steadily approaching strong resistance around 0.6790 – 0.6800. The market has actually broken that area this morning, which could be seen as a technical signal to go long.

Right now, everything looks to be in the bulls favor on AUD/CHF, and if you’re in that camp, then you could go with a couple of entry strategies to play the break: 1. long full position at market or 2. scale in from current levels down to the strong level of interest around 0.6790. With a daily ATR of around 45 – 50 pips, shooting for a short-term target of around 40 pips is viable one for the next session, but a better idea may be to play it as a swing position, using the daily ATR as a stop guide and 2 to 3 times that as a target given the lack of near-term resistance levels ahead.

For the bears, we’ll need to see a negative turn in the U.S.-China trade story for this to become a legit short play, and if we do see that scenario play out, then a break of the rising ‘lows’ pattern is the signal to watch out for. Entering in that area also provides an attractive potential R:R with the October lows around 0.6665 more than two daily ATR away.