Risk aversion is the name of the game early this week, as COVID lockdown protests are worsening across China.
Will this spur a break lower for AUD/CHF?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
WTI crude oil tumbles more than $2 per barrel on China’s COVID protests
COVID cases in Beijing almost doubled over the weekend
BOJ Gov. Kuroda: Wage gains supportive of more stable inflation
RBA head Lowe refrains from hinting at faster pace of rate hikes
Australian retail sales down 0.2% m/m in Oct. vs. projected 0.5% uptick
Upcoming Potential Catalysts on the Forex Economic Calendar:
ECB head Lagarde’s speech at 2:00 pm GMT
FOMC members Bullard and Williams to testify at 5:00 pm GMT
Japanese retail sales at 11:50 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/CHF
It’s not lookin’ good for the Aussie, mates!
Risk-off flows stemming from China’s COVID lockdowns and protests are already weighing on higher-yielding currencies, plus Australia reported downbeat retail sales data earlier.
This might mean a break lower for AUD/CHF, as the pair tests the bottom of its descending triangle pattern.
If that happens, price could tumble by at least the same height as the chart formation, which spans roughly 100 pips.
The 100 SMA is below the 200 SMA to hint that the path of least resistance is to the downside or that support is more likely to break than to hold.
However, Stochastic is hovering around the oversold region to reflect exhaustion among sellers. Turning higher would mean that buyers are back in action, possibly lifting the pair back up to the triangle top.
There’s not much in the way of top-tier reports in the next trading sessions, which means that market players might simply take cues from market sentiment.
Better keep close tabs on the headlines and manage your risk properly then!
