The Australian dollar versus the US dollar currency pair dropped after confirming the resistance of 0.6858, but it seems that it has a hard time breaching the support of 0.6700. However, will 0.6700 stand yet again?
After the drop that managed to confirm 0.6800 as resistance, the price made a new low today, which is a good thing from the bearish perspective. On the other hand, stalling here can be translated as a lack of bearish determination.
If the price does manage to close the day under 0.6700, then further decline is to be expected, targeting 0.6600. But if the price does the contrary, then — at least from the logical point of view — an appreciation is in the cards.
A known fact is that after an important movement — such as the current strong decline — profits will be booked. If the sellers are closing (part of) their positions, they will cause an appreciation from the respective area, and as 0.6700 is a good area for that, the resulting appreciation is the effect.
So, a failure to break the level can only be coined by a bullish pattern forming at the 0.6700 area — in which case the price will aim for 0.6858. Otherwise, further decline is just a matter of time.
The price stopped at the 0.0 Fibonacci retracement level. The price could consolidate above the 0.0 level and under the psychological 0.6700 — or under 0.0, if it later breaches it — or it could retrace to confirm once more 23.6 as resistance once more.
As long as 23.6 is not taken out, further decline is a possibility, targeting 0.6650 first and then 0.6600.
Of course, if 0.0 is falsely pierced, then a revisit of 23.6 is almost a sure thing.
Levels to keep an eye on:
D1: 0.6700 0.6600 0.6800
H4: 0.6700 0.6650 0.6600 and the Fibonacci retracement levels of 0.0 and 23.6
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