Muhammad Faraz 
AUDCHF Breakdown 40-Pip Drop to 0.520 Likely
The AUD/CHF hourly chart reveals the currency pair testing key support levels, currently trading at 0.52424 (+0.02%) as it approaches our bearish targets at 0.522 and 0.520. This analysis examines the technical factors suggesting further downside potential for the pair, with particular attention to emerging bearish momentum and critical support levels.
Current Market Position and Technical Signals
AUD/CHF displays several concerning technical characteristics:
- Weak Bounce: Minimal 0.02% gain after recent declines
- Tight Range: Just 30 pips between high/low (0.52408-0.52438)
- Lower Highs: Established downtrend pattern
- Support Test: Third touch of current levels
- Bearish Alignment: CHF strengthening as safe-haven flows return
The pair shows clear signs of distribution near current levels, unable to stage a meaningful recovery.
Critical Levels and Downside Pathway
Resistance Structure (New Ceiling):
- Immediate Resistance: 0.52438 (today’s high)
- Key Supply Zone: 0.52500 (psychological barrier)
- Major Resistance: 0.52650 (recent swing high)
Downside Targets:
- First Target: 0.52283 (recent low)
- Primary Target: 0.52007 (2024 support level)
- Extension Potential: 0.51800 (yearly lows)
The 0.52283 and 0.52007 levels represent significant technical supports that could trigger profit-taking if reached.
Technical Indicators Supporting Bearish View
- Trend Structure: Consistently lower highs since August peak
- Momentum: RSI struggling below 50 level
- Volume Profile: Higher volume on down moves
- Candlestick Patterns: Lack of bullish conviction
- Fundamental Alignment: RBA dovishness vs SNB stability
Bearish Trading Strategy
Entry Approaches:
- Current Levels: 0.52420 with stop above 0.52480
- Pullback Entry: On retest of 0.52500 resistance
Stop Placement:
- Hourly close above 0.52500 invalidates bearish thesis
Profit Targets:
- First Target: 0.52283 (50% position)
- Final Target: 0.52007 (full position)
- Trailing Stop: Move to breakeven at 0.52350
Key Risk Factors to Monitor
- RBA Surprises: Unexpected hawkish shift
- SNB Intervention: CHF weakening measures
- Commodity Prices: AUD-positive commodity rallies
- Technical Rebound: Oversold conditions may cause short-term bounce
Conclusion: High-Probability Bearish Continuation
AUD/CHF presents a compelling short opportunity with clearly defined risk parameters. The path to 0.520 appears probable given the weak technical structure and fundamental backdrop. Traders should watch for potential retests of 0.52500 as secondary entry opportunities while managing risk appropriately.
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