We ended last week looking for the #AUDCHF reversal set up after the price formed a head and shoulders pattern.
In this video, we point out the key levels to watch for short opportunities.
We identified this currency pair analysing the strength and weakness of individual currencies.
Hi, and welcome to this Blueberry Markets video update, with me, John Kibbler, Head Currency Analyst.
In this video, we’re going to take a look at AUD/CHF. Aussie is still on our watch list to look for those reversal set-ups.
So, as we can see here, the price formed a really nice head and shoulders pattern on the four-hour timeframe off these key resistance zones. You can see we’ve formed that left shoulder, head, and right shoulder here.
The price broke to the downside nicely; what we were looking for are those Aussie reversals. We’re looking for that change in simplicity, which formed here.
There are areas of interest I wanted to take a quick look at. The first one is to go back to that weekly timeframe; you can see the area of support where I’m expecting the price to come and retest – it’s this candlestick here.
I’ve chosen this one because that’s where the market found some slight resistance in the past. The market has come up into this level and retested it for whatever reason, rejected, rallied back up, broke through, closed at the same level again, broke through, and then it had that impulse move.
I’m looking for that area to be tested once again.
If I go down to the four-hour timeframe, you can see that it’s a quite decent bit of zone to watch out for AUD/CHF if I look left.
How I’m going to get short, well I’m going to look for the price to rally first. I want to see it rally into either one or two levels. The first zone is the previous swing high that we’re looking at, around the 650 area, because if the market rallies, rejects, breaks through and closes below, that’s a false breakout. We could be looking for a short opportunity back down into this 6347 area.
The second area of interest is going to be the neckline of the head and shoulders pattern; this may come hand in hand. We may get a rally, break out, a retest of the neckline, then a close back below this structure high here – forming a bearish fake-out pattern – which will then give us a reason to get short on AUD/CHF, targetting that 6350 area.
There are different areas of resistance to think about, but if the price does head towards this 6550 area and starts to find some bearish price action, that could be interesting for a short opportunity in that key supporting area.
Thanks for watching this video update, and I’ll speak to you tomorrow.
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