The Australian dollar versus the US dollar currency pair reached the target of 0.6800 and began a correction. Which are the odds for the appreciation to continue?
The consolidation phase in which the currency pair is in and which is limited by the resistance of 0.6858 and the support of 0.6700, respectively, may not continue for too much time. A reason for such an expectation can be ascribed to the following two judgments.
First of all, the price was rejected multiple times as it visited the 0.6700 support level. This is how the bulls showed their presence in the market, a presence that continued as they pushed the price higher and higher, printing higher lows and higher highs until they eventually pierced 0.6800 and reached 0.6858.
Besides this bullish pressure, the second argument that continues to favor the appreciation is the importance of the 0.6800 and the fact that it has been pierced, with the subsequent departure of the price. It is easy to see that 0.6800 limited any appreciations for some while, before and after the bearish endeavor that started on September 18. But now, as the price managed yet again to pierce the level, given the bullish dominance, the market could very well give credit to the bulls and, thus, be seeking support from where a new upwards leg could be started. And 0.6800 could just be it. Of course, the previous peak of 0.6810 could serve this purpose just as well.
After 0.6858 is pierced and confirmed as support, the resistance trendline of the descending channel represents a first profit taking area, corresponding to 0.6910.
The price displays a continuation structure, an angled rectangle, respectively. As the chart pattern is preceded by an appreciation, the expected outcome is another upwards leg.
If the price manages to confirm the 38.2 Fibonacci retracement level as support, then a first profit taking area is represented by the 50.0 projection.
In the case of confirmation of 38.2 as a resistance, a revisit of 23.6 is a possibility, with bullish rearming around this area, a first target being 38.2.
Levels to keep an eye on:
D1: 0.6810 0.6800 0.6858 0.6910
H4: Fibonacci retracement levels of 38.2 50.0 23.6
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