TheÂ Australian dollar vs. theÂ US dollar is quietly preparing anÂ ascent while evolving casually inÂ theÂ descending channel that began aÂ year ago.
TheÂ pair is inÂ aÂ descending trend, theÂ resistance line ofÂ which can be drawn byÂ uniting theÂ highs ofÂ July 8, 2018, andÂ December 3, 2018, respectively. Besides theÂ resistance line, two major areas that keep theÂ price inÂ check are theÂ strong ex-support area ofÂ 0.7053 andÂ 0.7013 andÂ theÂ major support ofÂ 0.6858.
OnÂ May 23, 2019, theÂ price confirmed theÂ major support andÂ rallied towards theÂ ex-support. This could have been considered aÂ throwback that would confirm theÂ ex-support asÂ resistance andÂ continue theÂ downwards move, pierce theÂ major support, andÂ make aÂ new low atÂ aÂ considerable distance from theÂ pierced level.
But it turned out that instead ofÂ successfully piercing it, theÂ price was able toÂ only materialize aÂ false break, aÂ break that led toÂ aÂ rally andÂ aÂ higher highÂ â if July 4 is toÂ be compared with ofÂ June 7.
InÂ this state ofÂ matters any new leg down will only attract new buyers, eyeing theÂ piercing ofÂ theÂ 0.7053Â â 0.7013 area.
Exploring theÂ direction given byÂ theÂ daily chart byÂ means ofÂ theÂ H4 chart, plotting aÂ Fibonacci retracement (from theÂ low ofÂ 18th June toÂ theÂ high ofÂ 1st ofÂ July) shows how well theÂ price respected theÂ 23.6 level andÂ also highlights theÂ technical 0.6935 asÂ it corresponds with theÂ 50.0 level, aÂ level that is theÂ favorite one toÂ be targeted byÂ corrections.
So, asÂ long asÂ theÂ price is confirming asÂ support theÂ 38.2 or, better, theÂ 50.0 Fibonacci retracement levels, further advancement is toÂ be expected, with targets such asÂ 0.7003 andÂ 0.7047 forÂ theÂ H4 chart andÂ 0.7100, followed byÂ 0.7201, forÂ theÂ daily chart.
Levels toÂ keep anÂ eye on:
D1: 0.7053 0.7013 0.7100 0.7201
H4: 0.6935 0.7003 0.7047
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