With the SNB monetary policy meeting coming soon, these technical setups on franc pairs are definitely ones to watch.
GBP/CHF could be the pair to watch this week because not only do you have potential volatility from the Swiss National Bank meeting ahead, but Sterling is always a potential mover with Brexit drama seemingly always around the corner. Not only that, but the U.K. has it’s own potential central bank catalyst with the BOE’s monetary policy committee meeting this week.
So, with a good chance of volatility rising in GBP/CHF, the current consolidation pattern of a rising triangle is definitely one to watch, particularly a break in the current resistance area around the 1.3350 area. But again with top tier catalysts from both sides of the pair, a downside break out of the rising lows and broken-resistance-turned-support around 1.3100 should always be on your watchlist.
Australia also has a couple of top tier catalysts of its own this week in the form of its quarterly employment update. That makes AUD/CHF a high probability mover as well, and with the pair consolidating in the form of a descending triangle, a downside breakout should be going on the watchlist as pressure from sellers seems to be growing week by week.
A down side break of the major support area around 0.7075 would likely draw in sellers, and with the next major support area not coming until the 0.6800 – 0.6900 area, sellers have a solid potential risk-to-reward setup on top of a high probability technical setup. But like GBP/CHF, you have to be open to an upside break of the falling ‘highs’ because of not only the top tier catalysts, but the upside potential R:R is pretty good too if targeting the 2019 high around 0.7260.
Last but not least, for those who aren’t interested or expect the SNB to spark volatility among forex traders, this AUD/CAD is a nice alternative as we’re seeing a textbook argument for a potential technical short in the works.
The pair has been in a sideways market for months now, and it’s currently testing an area that’s held as a major resistance area since mid-February just under the 0.9500 handle. Stochastic is signaling potentially overbought conditions as the strong resistance is tested, making this a high probability short setup.
Again, we’ve got top tier catalyst from both the Aussie and the Loonie this week (Canadian CPI and retail sales data this Friday), so we’ve gotta be open to the possibility to an upside breakout if the data supports it.