The Australian dollar versus the Canadian dollar currency pair printed a megaphone in an area from where a rotation could decide the fate of the pair for the next few months.
After not being able to remain above the major support of 0.9300, the price entered in a descending trend that etched a low at 0.8835 as part of the megaphone, a structure that could signal the end of the trend.
The low at 0.8835 belongs to a bullish engulfing pattern, a very strong pattern in itself. However, what makes the pattern even stronger is the context: that it pierced a respected local support level of the consolidation phase, 0.8918 respectively.
This is the reason why the confirmation on October 7 of the double resistance made possible by the upper line of the descending channel and the 0.9100 level did not hold the necessary determination to create a new leg down, leading to the bullish endeavor on October 11 which ended as a false break of the aforementioned double resistance.
But the fact that this false piercing also printed a higher high at 0.9037 made the bears even more reluctant to make any new attempts to push the price to the south. The neat thing is that this high can now be used as a reference point for when the megaphone gets confirmed. A part of this confirmation already materialized, as the bulls totally invalidated the bearish profile by revisiting 0.8918, a behavior that — at the time of writing — could lead to the formation of a pin-bar. In other words, after 0.8918 was falsely pierced, the price came back to confirm it as support and thus made sure that the bears got the message: the bulls take the decisions now.
So, after 0.9037 is taken out, the price could seek to confirm 0.9010 as support, leading to targeting the psychological 0.9100 first, followed by 0.9200, and 0.9300 respectively.
The price confirmed 0.8932 as support, making a strong retracement from here. If it manages to conquer 0.8985, then 0.9014 is the first target, followed by 0.9105.
Only if 0.8932 gets taken out would the profile switch to downside, targeting 0.8872
Levels to keep an eye on:
D1: 0.8918 0.9010 0.9200 0.9300
H4: 0.8923 0.8985 0.9041 0.9105 0.8872
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