AUDCHF currency pair has been moving for a long time in a bearish channel. As a result of reflection from channel support, since October 2015 we have seen increases which, if compared with the history of this instrument, seem to be less dynamic.
Looking at weekly chart, we notice that the market has been trading for more than 2.5 years, and more specifically since the memorable “Black Thursday,” when a drastic and unexpected collapse of the market caused by the decision of the Swiss National Bank (SNB) to cut interest rates and abandon the rigid EUR exchange rate / CHF at 1.20, moves in the horizontal trend.
It is worth noting that the course has very accurately tested the defeated level 0.7750. In January 2014, this level was an important support, but after being defeated turned into resistance. It is worth noting that market is currently in vicinity of this level and it is already its third re-test.
If this zone would be defeated this time, we could expect a change in market sentiment and continuation of bullish trend even to level 0.8750 ie exactly 1000 pips up.
Looking at current situation from the point of view of daily intervals, it is worthwhile to refine the current resistance from 0.7750 to 0.7780. We will see that last week there was a strong supply reaction in this area.
Since then, the market has been moving quietly to the south, respecting precisely support of downward channel. Only breaking the lower limitation of the channel would change sentiment on this pair.
On 30-minute chart, we see that downward channel has also formed a smaller growth channel but bulls have not enough strength to overcome the local resistance of 0.7720. So if next time we break the bottom of the narrower channel, we could expect pair to decline.
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