The Australian dollar versus the US dollar currency pair fell under the 0.6800 psychological level, but still, there are reasons to expect an upside movement.
The rally that started at 0.6700 and which is part of a correction of the descending trend paused at the major support of 0.6858. As it tried to conquer it, consolidating above it, the price failed and dropped under the 0.6800 psychological level.
While such behavior could be considered a piercing of the 0.6800 level and thus fuel the expectations of a bearish outcome, some variables point to the price moving towards the north.
The first clue is the strong bullish candle on September 24. The second reasoning goes like so: if, as previously said, the current market phase is a correction — so the overall direction for the moment is upward — and the price fell so steeply so that for the bulls this is a very cheap price to buy from, then there is a lot of pressure to the upside.
The counterarguments, such as that the price is expected to confirm 0.6800 as resistance because it pierced it days ago, failing to offer support and that because 0.6858 — a major ex-support — was confirmed as resistance the price should go south, cannot stand. The first one is invalidated by the explanation given in the previous paragraph, while the second one is unmounted by the fact that 0.6700 repelled the price three times, whereas 0.6858 repelled it only once in the very recent history.
So, as long as the price is not touching 0.6750, the 0.6858 level is to be revisited, followed by 0.6900 and 0.7013.
The price looks like it is being limited by the 23.6 Fibonacci retracement level and as long as this continues, 50.0, succeeded by 61.8, are to be paid a visit.
Only if the 23.6 level fails, then the price may head-on for 0.6700
Levels to keep an eye on:
D1: 0.6800 0.6858 0.6900 0.7013 0.6700
H4: The Fibonacci retracement levels of 23.6, 50.0, and 61.8
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