AUDCHF is moving between support at 0.7130 and resistance at 0.7790. In addition to these, intermediate levels close to 0.7470 and 0.7270 are also important.

In the second half of October we witnessed a third rebound from key resistance at 0.7790. At that time, a bearish formation Outside Bar was formed, and the subsequent drops led to a new low, breaking the trend line extended from June minimum.

As you can see on the daily chart below, this line has been tested in recent days as a new resistance. As part of the test, another bearish formation (engulfing bar) was formed yesterday, after which today’s quotes slide.

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The price action described above indicates potential for further declines. The nearest target is now support area of 0.7470. If sellers could overcome it, we might see another 200 pips depreciation.

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