Jobs data has been coming in weaker than expected for Australia lately.
Is AUD/CHF in for a bearish breakout soon?
AUD/CHF has been pacing back and forth between resistance at the .6020 area and support around .5875 for nearly a month already.
Price is currently stuck above the area of interest at the middle of its range, and technical indicators plus those lower highs suggest that bearish pressure is building up.
The 100 SMA is below the 200 SMA to reflect downside momentum while the 200 SMA recently held as dynamic resistance. To top it off, Stochastic has some room to head lower before indicating exhaustion among sellers.A break below current levels near the .5950 minor psychological level could set off a move to S1 (.5930) or all the way down to S2 (.5900) close to the bottom of the range.
Note that AUD/CHF moves an average of 52.2 pips per day, so the range support should be within striking distance if a short-term breakdown happens.
Fundamentals also seem to agree with the Aussie going down under, as employment figures haven’t been so impressive lately.
For one, the quarterly wage price index fell short of estimates with a 0.8% increase for Q1, suggesting weaker inflationary pressures. In addition, today’s jobs release revealed a 4.3K loss in hiring instead of the projected 24.8K gain for April.
As for the franc, there hasn’t been any economic release from Switzerland lately, leaving the lower-yielding currency to take advantage of risk-off flows. So far, uncertainties surrounding the U.S. debt ceiling issue and banking sector troubles are keeping safe-havens supported.
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