New Year sends red flag for bulls of AUDCHF with the formation of most likely big resembling bearish engulfing pattern at 0.7180 at current juncture on daily chart.
AUDCHF bearish swings have been a slant decline, it forms downward channel where it has rejected convincingly at channel resistance level of 0.7549 with huge volumes.
Bearish momentum is intensifying and could be measured with a distance of around 1700 pips (see blue-circled area where a big bearish candle with big real body measures the distance of the channel almost accurately).
As and when the pair has rejected several times at the channel resistance bears have evidenced considerable dips towards channel baseline.
It has again witnessed supports at such juncture to bounce back again (see yellow colored circles).
So contemplating the previous long term downtrend, we think this pair had taken a brief pause in last 2 months while a slight recovery took place, bounces from last month's lows of 0.6532 to this month's highs of 0.7548 levels where bears have begun being alert to push southwards way below 21DMA.
In between this phenomenon, it confirms us the clear bearish trend to prolong.
It cannot be deemed as the pair continues to flow in the same direction but instead its long lasting loses hold sturdy in near future.
The current prices have fallen well below moving averages and both leading indicators (RSI & stochastic curves) have reached oversold zones but no clear trace of buying interest.
Hence, all these technical aspects boost up the long-term bearish trend to prevail and targets towards 0.7063 and 0.6969 regions.
