The Australian dollar versus the US dollar currency pair has not seized the opportunity to go for 0.7200, probably because of a resistance that is to hard to breach.
Since the middle of June 2018 the pair is in a descending move and the latest developments etched on the chart what can be considered an inverted head and shoulders. This, added to the longevity of the trend, has all the reasons to point towards the possibility of a trend change.
But it seems that this context is not enough. On July 18, 2019, the price pierced the important resistance area of 0.7055 and 0.6986. However, the candle that followed — and the ones that came afterwards — were very clearly bearish driven, rendering the brake of 0.7055 as false, and bringing the price beneath 0.6986, respectively.
If this bearish takeover is summed up with the fact that the price came very close to the resistance line of the descending trend, then the conclusion may very well be that the strong ex-support is not yet ready to retake its role, which translates into the possibility of the price to materialize a new impulsive wave in the direction of the main trend.
While appreciations may be seen, they will serve as new opportunities for the bears. The next step would be the confirmation of 0.7013 as resistance, with a first target at the major support of 0.6858.
Plotting a Fibonacci retracement from 0.6831 to 0.7081 makes it clear that the price seeks to pierce or confirm each level as resistance rather than support.
On the other hand, the price fell under the level of 0.7047 which it had previously conquered, this being another sign that favors the bears.
If the bulls do not show at 0.6935 that they are still in the market, then — adding the fact that the area is the “last frontier” in the sense that 61.8 lies just around the same place — 0.6865 is in reach.
If the bulls succeed in making a comeback from the level of 0.6935, then there is a chance of a renewed willing to end the descending trend.
Levels to keep an eye on:
D1: 0.7055 0.7013 0.6858
H4: 0.7003 0.6935 0.6865
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