The Australian dollar versus the US dollar currency pair looked as if it was determined to pierce the 0.6858 major support, but it changed course instead. The question is now whether or not this confirmation was decisive for the medium-term evolution.
Long-term perspective
Beginning with the confirmation as a support of 0.7055 on October 8, 2018, the bearish movement was stalled. After a first failed attempt to break the support area of 0.7055 and 0.7013 on January 2, 2019, the price printed a low around the 0.6858 level, rendering it as a support. Then, in the middle of May 2019, after another piercing of the same 0.7055 and 0.7013 strong ex-support area the bears managed to extend a little beyond the important 0.6858 level only to get pushed back towards the ex-support.
This behavior gives a clear directional cue, the message being that the bulls are determined to guard the major support of 0.6858, with the bullish engulfing on June 18, 2019 standing as a testimony in this regard.
Given the context, any downwards movement can be seen as an opportunity for the bulls to start a new rally that will get the price even higher, the first target being 0.7013. If the price manages to conquer the strong ex-support, the only thing standing in the way of the appreciation is the upped line of the descending channel, joining the highs of June 8, 2018 and December 3, 2018, respectively. If the line holds and the price comes back beneath the strong ex-support area, then the bears might get another chance to break 0.6858.
Short-term perspective
The ascending move that began from the low of 0.6831 confirmed as support two important levels: 0.6965 and 0.6933, thus adding steam to the bullish optimism.
As it can be seen from the chart, every retracement prints a short-lived low that materializes a steep ascension.
Even if the trendline gets pierced, as long as 0.6935 (and the corresponding 0.6900 psychological level) keep up with any bearish pressure, the appreciation is in well shape to continue, targeting 0.7003, succeeded by 0.7046. Only a break of the 0.6900 psychological level will put the bullish scenario on hold.
Levels to keep an eye on:
D1: 0.7055 0.7013
H4: 0.6935 0.6900 0.7003 0.7046
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