The Australian dollar versus the US dollar currency pair rallied from the 0.6700 area and is now testing the old major support at 0.6858.
After the fall from the 0.7055 — 0.7013 resistance area, the price went under the major support of 0.6858 and etched a local resistance at the 0.6800 psychological level. But every attempt to break the lows of 0.6700 was futile.
As a consequence, the bulls took control and pierced the 0.6800 level, bringing the price to the old major support, at 0.6858. This looks very similar to a corrective wave of a descending trend and given the strength of the appreciation, chances are that 0.6858 will eventually be pierced, with the price heading towards 0.6900 and 0.7000, respectively.
There is a chance for the bears to try and short the market, but because of the strong bullish profile, any such attempts are prone to failing, as any decrease represents a new chance for the bulls to go long at better prices.
So, as long as the price sways above the 0.6800 level, the profile remains bullish targeting 0.6900, followed by 0.7000.
The price conquered the 38.2 Fibonacci retracement level and stopped just under the 0.6865 resistance. There are chances that we will see some battle going on here between the sellers and the buyers, but with the 38.2 level cleared — and given the context discussed for the daily chart — the piercing of 0.6865 is just a matter of time.
The first target is represented by the 61.8 level, which coincides with the 0.6935 technical level. Even if 61.8 is a bearish last standing, the fact that the price would have already conquered 0.6865, it isn’t sustained by a bearish context, which translates in 0.7000 being the main target.
Levels to keep an eye on:
D1: 0.6858 0.6900 0.7000
H4: 0.6865 0.6935 0.7000 and the Fibonacci retracement levels — mainly 38.2 and 50.0
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