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AUDCHF: Testing Year lows

The central bank of Australia (RBA) has highlighted the beneficial impact of the weakening dollar on the domestic economic sectors. It said the currency’s slide is actually helping in the transition of Australian economy to move into a new phase from the mining boom, besides accelerating exports.

Consumer price inflation in Switzerland decreased by -0.6% from a month earlier in July, compared to forecasts for a decline of-0.4%, fueling concerns over the threat of deflation.

The Swiss franc (CHF) avoided continued depreciation thanks to safe-haven demand amid disappointing factory output from China and tumbling commodity prices.

Since the start of the year the currency fell more than 14.5% and is in a bearish phase, testing the lows of the year at 0.6892. Last week the AUDCHF fell and close in the red near the low of the week with a wide range. The stochastic is showing a change in momentum from bullish to bearish and is still below the 50 mid line.

Expecting a downward move to a Fibonacci extension at 0.6812 on a break below Year low at 0.6892 (scenario 1) or a break above the weekly support at 0.7074 could throw the currency up to a key level at 0.7308 (scenario 2).