AUDCHF: Strategic Shorts Awaiting Key PullbacksTechnical Analysis:
Weekly Chart: Last week's price action shows a clear shift in sentiment with a lower low and lower close, indicating potential for short positions on lower timeframes. In the long run, I believe the price is heading towards the next key area around 0.5869/61.
Daily Chart: The daily price action is a bit complicated as it currently interacts with the 61% Fibonacci level. However, Friday's price action shows a clear rejection from the upside, aligning with the weekly sentiment for short positions on the lower timeframe. In the week ahead, if the price continues to decline, the next area of caution would be the 78% Fibonacci level around 0.5908.
4-Hour Chart: Combining the weekly sentiment with the daily, it seems we are well-positioned for a short position. However, we won't rush into shorts unless the price reaches a key level for a pullback. On the 4-hour chart, there are two potential entry plans:
Plan 1: Since the current price action on the 4-hour chart is consolidating, we would like to see a pullback towards the top of the range and then target the bottom.
Sell Limit Entry: 0.5960/62
Stop Loss: Above 0.5967
Target: 0.5934/29
Plan 2: If the price doesn't pull back to the top of the range and instead breaks through the support, we should wait for the price to come back and retest the newly turned support-turned-resistance around 0.5929.
Sell Limit Entry: 0.5929/34
Stop Loss: Above 0.5940
Target(s): 0.5908, 0.5870
Fundamental Analysis:
There’s not much happening with AUD except for the Flash Manufacturing PMI on Wednesday, July 24th. On the other hand, CHF remains strong due to the current de-risking theme.
Hope you have a fantastic week ahead. Happy trading!
