(Melina Deltas, CFTe – XM)
AUDUSD tests 0.6900, remaining in descending channel
AUDUSD is carrying on with its rebound from the previous week with better impetus than it had before, within its extending pattern of decline. The price is currently approaching the 0.6900 mark and then the next key level to have in mind is the 0.7000 that may switch the bias to neutral.
The short-term bias appears to be bullish as the MACD keeps gaining ground above its red signal line, and the RSI is looking to be working its way up over its 50-neutral threshold, but there is still room for improvement.
If the pair is able to push higher, the 40-day simple moving average (SMA), which is located around 0.6950, may serve as a crucial point for more aggressive bullish movement. This is also just below the resistance at 0.6965 and the 0.7070 barrier. Moreover, the 200-day SMA at 0.7190 may garner some attention. If prices continue to rise, the resistance could approach the limiting range between 0.7280 and 0.7340.
In the event that the pair reverts back to a downward trend, investors may turn their trading first at the low point that occurred at 0.6680, which is the 26-month low, and then at the 0.6570 support, registered in May 2020. If the price continues to fall, the next potential support might occur somewhere close to the 0.6250 support level, which was taken from the bottoms in April 2020.
In the medium-term outlook, AUDUSD may remain increasingly pessimistic as long as it maintains its move within a descending channel and, more crucially, remains below the 200-day SMA.
EURCHF flags bullish trend reversal ahead of ECB
EURCHF pivoted northwards to re-enter the 0.9900 territory after its latest pullback in the four-hour chart ceased near the 50-period simple moving average (SMA) at 0.9870.
There are a couple of bullish signs, which feed optimism that the current recovery mood could persist in the coming sessions. The RSI has bounced back above its 50 neutral mark, the stochastics have resumed their upward slope, while the MACD, although beneath its red signal line, seems to be gaining positive momentum.
Trend signals are also rosy. Besides the bullish cross between the 20- and 50-period simple moving averages (SMAs) and the rebound on the penetrated bearish channel, investors will closely monitor the formation of a bullish inverse head and shoulder pattern set around the seven-year low of 0.9803. To confirm the bullish pattern, the pair will need to successfully violate the neckline at 0.9945. If that turns out to be the case, the price could initially test the limits around 0.9975 before speeding up to July’s high of 1.0045. Beyond that, the next target will be the 200-period SMA at 1.0093.
Should the bears retake control, they will first attempt to breach the 50-period SMA at 0.9875 with scope to access the 0.9832 – 0.9803 support zone. A durable move below the latter would open the door for the key 0.9736 – 0.9700 area, where the channel’s lower boundary and the 2015 base are placed. Lower, all attention will turn to the 2015 bottom of 0.9649.
In brief, EURCHF is surrounded by positive vibes in the short-term picture. A sustainable rally above the threshold of 0.9945 is expected to attract new buying interest in the market.