FxWirePro: AUD/CHF breaks channel base support, hits new 2-year lows at 0.7061, bias lower

AUD/CHF chart on Trading View used for analysis

• Aussie dented on weaker-than-expected Australia Q2 Capex reading, drags AUD/CHF lower.
   
• The pair hit new 2-year lows at 0.7061 and we see scope for further weakness.
   
• Australia's headline CAPEX fell 2.5% q/q, missing forecasts for a growth of 0.6% and compared to a 0.4% growth in the previous quarter. 
   
• Further, building permits fell 5.2% m/m also missing the estimated decline of 2.5%.
   
• The dismal headline CAPEX data might lead the investors to scale back expectations of an RBA rate hike weighing further on the Aussie.
   
• Technical studies for the pair look weak. Price action has broken below channel base raising scope for further weakness.
   
• Immediate support lies at 0.7032 (June 2016 low) ahead of 0.7020 (61.8% Fib).
   
• Failure to hold break below channel base and break above 21-EMA could see further upside.

Support levels - 0.7032 (June 2016 low), 0.7020 (61.8% Fib), 0.70 (trendline)

Resistance levels - 0.71 (channel base), 0.7146 (5-DMA), 0.7225 (21-EMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-AUD-CHF-Trade-Idea-1420997) has hit all targets. 

Recommendation: Book partial profits, trail SL to 0.7110, hold for further weakness. Targets extended to 0.7035/ 0.7020/ 0.70

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -32.9275 (Neutral), while Hourly CHF Spot Index was at 27.0931 (Neutral) at 0520 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.