The Australian dollar climbed higher during the late Asian session, as the data released in China exceeded market expectations. The Chinese manufacturing PMI registered a seven-month high of 50.8, beating expectations of 49.7. This was viewed on the positive side by Australian dollar buyers, as pairs like AUD/USD and AUD/CHF were trading higher. One of the biggest gainers was AUD/CHF. The pair climbed higher after the data release, and traded close to an important trend line on the hourly time frame.
Currently, the pair is trading around the same trend line, as highlighted on the chart, and appears that it may break it. If it manages to settle above the line, there may be a run towards the last high of 0.8479. It is worth mentioning that the pair has breached the 76.4% Fibonacci level of the last drop from the 0.8479 high to the 0.8369 low. Moreover, it is also trading above the 100 and 200 simple moving averages on the hourly time frame. These points suggest that there may be a move higher rather than a failure to break the trend line.
If the pair fails to trade higher and challenge the previous high, then it might find buyers around the broken 200 hourly SMA. More losses may take it down towards the 100 hourly SMA. The RSI has reached an extreme level on the hourly chart, which means that we may see a small pullback before a climb back up again.
There are no major risk events scheduled in the coming session for Aussie and Swiss. Therefore, the pair may be driven mostly by market sentiment in the short term.
- IKOFX Technical Team
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