FOREX Chart Of The Day: AUDCHF Reversal Set Up

Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.

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In this video, we’re going to take a look at AUD/USD and some Aussie pairs of interest. We’re still in EUR/AUD, GBP/AUD; we are looking towards AUD/CHF because this is potentially setting up for an excellent opportunity.

Daily and weekly timeframe

Taking a look at this daily timeframe, we can see that I’ve got this zone mapped out here. If I go up to a weekly timeframe, you can see that it’s a little bit of a zone, mainly around the 6650 area, where the price is in some resistance and support in the past. I was looking for the price to come up to this level and react.

Four-hour timeframe

If I go down into the four-hour timeframe, what we look for, once we get that daily bearish close, is a change in cycle on that four-hour timeframe. As you can see here, the price rallied up, came back down, then formed a head and shoulders pattern: we have the left shoulder, the head, and the right shoulder.

The price has now broken through, giving us a nice lower low. The lower closed and set up where the price is closing but just below the previous candlestick lows. This confirms the break of those lows there.

Now that we’ve had that, we’ve had a change in cycle at a key level of resistance. What I’m looking for now is the continuation of that trend to the downside.

I’m looking for the price to pull back into this 6600 or 6580 level. We can start looking for short opportunities again on AUD/CHF in line with this change in trend.

I’m going to look for the price to bounce from this level. Where would the price potentially go to?

If I go back to the daily timeframe, we can see there’s a zone through here, which is the previous structure high.

Jumping back into the four-hour, you could sell into this zone. You could place an order at 6600, with your stop-loss above the swing high and target into this key zone here; it looks something like that. Or, what I usually do is, wait for the price to come back up into this level, look for the price action, and take a short opportunity on the price action on a lower timeframe.

So, wait for a change of cycle on a lower timeframe in order to look for a position in this market. But Aussie is looking pretty good for those short opportunities now. It’s looking like that reversal is playing out.

EURAUD and GBPAUD

Suppose we take a look at EUR/AUD, it’s starting to push to the upside quite nicely.

If we take a look at GBP/AUD as well, it’s trying to push up higher.

AUDCHF

AUD/CHF is the one to watch. I quite like this idea because the Swiss Franc is quite strong against the US Dollar at the moment. So, AUD/CHF makes sense to look for a move to the downside.

Keep an eye on this, and I’ll catch you on the next video update.

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