The Aussie dollar is the currency to watch this week with Australia coming out with its monthly report on employment conditions, so here are bullish and bearish setups to watch out for if you’re bold enough to play the potential volatility spike!
For the traders that think we’re going to see buyers in the Australian dollar this week because of the jobs report, check out the rising market in AUD/CHF. The pair moved higher last week due to positive risk conditions and Australian data, but 0.7180 was a problem for the bulls as was rejected twice since last Thursday.
A break higher off of a strong catalyst is one to watch for buyers this week, and with a daily ATR of over 60 pips, the next resistance area around 0.7250 should be a problem to reach by the end of the week if the catalyst is bullish enough for the Aussie.
There’s also a bearish setup to watch of course with the rising lows as a potential short entry point for sellers if we get negative Aussie news, although if targeting the swing lows and minor support area around 0.7080, then the potential risk-to-reward is not as favorable as the long setup, of course depending on your stops.
For you Aussie bears out there, AUD/NZD presents setups for both aggressive and conservative entries for everyone to choose from.
The 1.0450 area was a pretty strong support area in 2019, but recently broken after a very positive reaction to last week’s RBNZ monetary policy statement. A move back to that area would be a conservative entry for any Aussie bears, but with good odds of it holding given its recent history as a very strong area of interest.
For the more bold, the market seems to be consolidating tighter and tighter around the 1.0400 major psychological handle, and if it breaks below the rising ‘lows’ around 1.0380 – 1.0390, look out for momentum sellers to jump in and take it lower if again, Aussie sentiment sours after the employment report.
And if you don’t want to mess with news events or changes in global risk sentiment, checkout this textbook range on CHF/JPY. The pair has been in a down trend over the last two months, but stuck in a range pattern between 109.50 to around 110.20 in February. It’s trading near the top of that range at the moment, but with stochastic moving out of over bought territory, it’s possible we may see a move back lower.
With no major economic or geopolitical events expected from Switzerland or Japan for the rest of the month, this might be the “safest” pure technical play around. Of course, nothing is ever guaranteed so to practice the art of setting stop losses no matter how good a trade looks!
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