The Australian dollar versus the Canadian dollar currency pair revisited the 0.9010 resistance level and now has to take a decision.
The price was in a descending channel that commenced on the beginning of August a consolidation phase limited by the 0.8918 support level and the 0.9010 resistance.
The fact that the price printed the low at 0.8835 as a false piercing of the support, to which adds the higher low on August 16, translates into a bullish profile. The only amendment would be the pin-bar crystalized on October 21 at the 0.9010 resistance which sets, at least theoretically, a bearish tone. However, the bearish movement that might come up and that the bears may greet, could in fact seed a new upwards leg.
In other words, the potential decline that could follow the yesterday’s pin-bar could end in such a manner that it will materialize a higher low in relation with the August 16 candle, thus increasing the chances for a bullish piercing of 0.9010. Noteworthy is that the potential higher low could form before the price touches the 0.8918 level or as a confirmation of that level as support, yet again.
Still, the megaphone pattern is still valid, so once the 0.9037 high is taken out, the bulls have a green light for the 0.9300 psychological level, with intermediate profit taking targets along the way that of course will be discussed at the appropriate moment.
The only thing that has the potential to change the bullish view is the confirmation of 0.8918 as resistance.
The price managed to get under 0.8985. From here, two possibilities arise.
The first one is for a quick retracement above the level, a behavior that renders the movement as a false piercing of 0.8985, a case in which the first target would be 0.9041.
The second possibility is for the price to continue to push lower. In this latter case, 0.8923 could serve as a support from where the bulls will push the price higher, targeting 0.8985, followed by 0.9041, and 0.9105 respectively.
Levels to keep an eye on:
D1: 0.9010 0.8918 0.9300
H4: 0.8985 0.9041 0.9105 0.9041 0.9105
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