So the Reserve Bank of Australia (RBA) raised its interest rates.
While Governor Lowe and his team recognized that inflation has passed its peak, they felt that 7% is still too high. They raised RBA’s interest rates by another 25 basis points to 4.10% and repeated that “Some further tightening of monetary policy may be required” to help return inflation to RBA’s targets.”
Since there were at least many traders priced in that the RBA would hold its rates steady, the “surprise” rate hike sent AUD higher against its counterparts.
AUD/CHF, in particular, jumped from its ranges near the .6000 psychological handle to trade closer to .6040.
But AUD is having trouble extending its gains. One possible reason is that Aussie bulls haven’t broken above the .6050 resistance since mid-April.
Just check the 4-hour chart below!
AUD/CHF: 4-hour
Coincidentally, today’s highs also line up with the S2 (.6040) of today’s Standard Pivot Points on the 15-minute time frame.
Will this lead to AUD/CHF seeing a pullback after a sharp upswing?
AUD/CHF: 15-min
A closer look at the 15-minute chart shows that the .6000 – .6010 zone is a pretty busy area that could attract a new round of buyers.
Not only does the zone line up with this week’s range, but it’s also near the 100 and 200 SMAs, trend line support, and the Pivot Point level near .6000.
A pullback to .6000 – .6010 could set AUD bulls for a good entry in case AUD/CHF extends its June uptrend.
AUD/CHF buyers can target the .6040 – .6050 resistance while placing stops just under the trend line support.
RBA Governor Lowe is set to deliver a speech later today and Australia will be printing its GDP data in the next Asian session trading.
If these events reinforce the RBA’s hawkish decision, then AUD/CHF could see new monthly highs.
Good luck and make sure to watch AUD/CHF’s daily average volatility so you know where to place your entry and exit targets!
