Are we about to see a range breakdown soon?
Here are the levels I’m watching on AUD/CHF in case risk-off flows pick up again.
Before moving on, ICYMI, yesterday’s watchlist looked at NZD/USD’s bearish pullback ahead of the U.S. CPI release. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. headline CPI up by 0.3% vs. 0.2% forecast in April
U.S. core CPI at 0.6% vs. 0.4% consensus, 0.3% previous
Australian MI inflation expectations down from 5.2% to 5.0%
New Zealand quarterly inflation expectations up from 3.27% to 3.29%
North Korea announces tight lockdowns on country’s first COVID-19 case
U.K. preliminary Q1 GDP at 0.8% vs. 1.0% forecast
U.K. construction output jumped 1.7% vs. projected 0.2% uptick in March
U.K. March industrial production sank by 0.2% vs. estimated flat reading
Swiss PPI up by 1.3% vs. projected 0.9% gain, previous 0.8% increase
U.S. headline and core PPI at 12:30 pm GMT
U.S. initial jobless claims at 12:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/CHF
Who’s up to trade a breakout today?
If you’re counting on a continuation of risk-off flows from earlier in the week, then this range support test on AUD/CHF is worth keeping tabs on.
The pair is already hanging out at the very bottom of its range around the .6860 mark, and technical indicators are hinting that the floor could give way soon.
The 100 SMA is below the 200 SMA to suggest that the path of least resistance is to the downside, possibly setting of a drop that’s the same height as the range or around 220 pips.
Meanwhile, Stochastic is heading south to reflect the presence of selling pressure. Just be careful since the oscillator is closing in on the oversold region to signal exhaustion.
Earlier on, Australia reported a dip in MI inflation expectations for April while Switzerland printed a stronger than expected PPI figure, tilting the odds in favor of a breakdown.
Also, risk appetite has been pretty shaky since investors are still wary of a recession in China due to its zero-COVID policies.