AUD/CHF traded higher on Tuesday, breaking above the resistance (now turned into support) barrier of 0.6885. On June 27th, the pair broke above the prior downtrend line taken from the peak of April 23rd, and after that, it continued printing higher highs and higher troughs above a newly-established upside support line drawn from the low of June 25th. So, having all these technical signs in mind, we believe that the short-term outlook of this exchange rate is somewhat positive.
At the time of writing, the rate looks to be heading towards the 0.6910 barrier, which provided decent resistance on June 11th and 12th. If this time around, the bulls are willing to drive the battle above that hurdle, then we may see them aiming for the 0.6950 area, which held the price from moving higher between June 4th and 6th. Another break, above 0.6950, could carry more bullish implications, perhaps paving the way for the psychological zone of 0.7000, which lies fractionally above the peak of May 30th.
Shifting attention to our short-term oscillators, we see that the RSI, already above 50, has turned up and now lies near its 70 line, while the MACD stands above both its zero and trigger lines, pointing north. Both indicators detect upside momentum and support the notion for further advances. That said, the RSI has flattened near its 70 level, which makes us cautious of a possible small setback before, and if, the bulls decide to shoot again.
However, in order to abandon the bullish case, we would like to see a slide back below 0.6855, a support marked by yesterday’s low. Such a move would confirm a forthcoming lower low on the 4-hour chart and could initially target the low of June 28th, at around 0.6825. If that level fails to stop the rate from drifting lower, then its break may allow extensions towards the 0.6775 zone, a support zone marked near an intraday swing low formed on June 25th.
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