US Dollar Price Forecast: USD/CHF Points Lower, AUD/USD Nears 11 Years Low
USD/CHF & AUD/USD Price Outlook
- Bearish signals on USD/CHF & AUD/USD Charts
- Will Bears continue controlling price action?
Bears in Charge
Last week, USD rallied against Swiss Franc to 0.9848 – its highest level in over two months. However, the market retreated after, and closed the weekly candlestick on Friday in the red with 0.3% loss.
Meanwhile, Australian Dollar lost more value verses US Dollar and printed 0.6586 – its lowest level in nearly 11 years. On Friday, AUD/USD rallied as some bears seemed to cover, then closed the weekly candlestick with 1.2% loss.
This, the Relative Strength Index (RSI) crossed below 50 on USD/CHF highlighting a possible start of downtrend move. On the other hand, the oscillator remained in oversold territory on AUD/USD emphasizing the strength of downtrend momentum.
USD/CHF Daily Price Chart (JUNE 6, 2018 – FEB 26, 2020) Zoomed Out
USD/CHF Daily Price Chart (Aug 13 – FEB 26, 2020) Zoomed IN
From the daily chart, we noticed that in mid-Dec last year bears ended the sideways move and started a downtrend momentum creating lower highs with lower lows. See the chart (zoomed out).
On Feb 7, USD/CHF broke above the neckline of inverted head and shoulders pattern residing at 0.9761. The price rallied after, yet failed to clear 0.9839 in multiple occasions generating a bearish signal. Yesterday, the pair produced another bearish signal as moved to a lower trading zone 0.9788 – 0.9659. Today, the price broke below the aforementioned neckline,negating the inverted head and shoulders pattern.
A close below the low end of the zone could mean more bearishness towards 0.9569. Further close below this level increases the likelihood of sending USDCHF towards 0.9428. Nevertheless, the weekly support levels and area printed on the chart (zoomed in) should be watched closely as some traders could exit/join the market around theses points.
On the flip-side, a close above the high end of the zone indicates bears reluctance. This could push USDCHF towards 0.9839. Further close above this level opens the door for a rally towards 0.9921. Although, the daily and weekly resistance levels and area underscored on the chart should be monitored.
AUD/USD Daily Price Chart (MAR 15, 2018 – FEB 26, 2020) Zoomed Out
AUD/USD Daily Price Chart (MAR 15, 2018 – FEB 26, 2020) Zoomed in
Looking at the four-hour chart, we notice that two weeks ago AUD/USD failed twice to close above 0.6745. This allowed bears to comeback and press to a lower trading zone 0.6594 – 0.6670. Yet, the price remained moving in this zone as failed in multiple occasions to fall to the next one, reflecting bear’s hesitation.
A close below the low end of the zone may encourage bears to press the pair towards 0.6459. Further close below this level could send AUDUSD even lower towards 0.6414. That said, the monthly support levels underlined on the chart (zoomed in) should be considered.
On the other hand, another failure in closing below the low end, reflects more hesitation form the bears. This could lead some of them to exit the market and cause a rally towards the high end of the zone. Further close above that level increases the likelihood of a surge towards 0.6745. In that scenario, the daily and weekly resistance areas and level marked on the chart should be kept in focus.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi