Good afternoon team,
Great start to the week with USDCAD and EURAUD hitting the TP targets. The markets reversed a number of the risk off moves over night as the US Government votes on the next stimulus package.
The US China tensions appear to be increasing with the US implementing further restrictions on Chinese officials. The visa restrictions affect officials that are believed to be responsible for the repression of religious practitioners and ethnic minority groups. Further actions are expected which include tighter visa restrictions on Chinese Communist Party members and a ban on goods made with forced labor. The trade war has negatively impacted the AUD previously.
The recent Covid-19 outbreak in Sydney and other parts of the world may also weigh down the risk on currency. The AUD is the main casualties of a negative market sentiment.
AUDCHF – Weekly Charts
The AUDCHF is trading at a historic weekly negative trend line. This has been used on a number of occasions as resistance and an area to sell down from.
AUDCHF – 1 Hour Charts
This setup appears to be a text book head and shoulders formation. Keep in mind the 0.6740 level is the invalidation point. A break above that zone will indicate a move to new highs.
We are looking to enter a short position, expecting a break below the neck line towards the 0.6600 level.
Trade setup: SELL Market execution, current price 0.6708, stop loss 0.6753 and take profit 0.6600.
Stop loss: 45 pips
Take profit: 108 pips