The Australian dollar versus the Japanese yen currency pair shows signs of strength from the bullish side.
After confirming the resistance of 80.54, the price began a descending movement that printed a low at 69.95 before rallying, thus rendering the pierce of 71.09 as a false one.
After that, it rallied towards the previous support level, 73.93, only to peak at 74.46 and retrace, confirming it as a resistance.
As the bears were celebrating their victory of converting the 73.93 support to resistance, the bulls managed to etch yet a new low, at 71.73, and drive the price above 73.93, taking out the previous high of 74.46.
Considering the false piecing of 71.09, the relation between 69.95 and 71.73, respectively, from which the latter is a higher high, and the 74.46 being outdone, the chart illustrates all the ingredients which point towards a bullish profile.
In such circumstances, the expectations are for the price to confirm a support from where a new upwards leg may continue the bullish endeavor started at the 71.09 support. For such a purpose, 73.93 is the best fit.
So, after the price falsely pierces — or forms a strong bullish pattern at — the 79.93 level, presenting it as support, the first target is represented by 76.02, followed by 77.51 in the case of a successful piercing and confirmation as support of 76.02.
The price is above the 73.90 level and prints a descending wedge, a continuation pattern that signals a bullish outcome. As a result, 74.96, followed by 75.33, are important targets.
Only the confirmation of 73.90 as resistance will open the door to 73.10. In such a scenario, the bulls might try to revisit 73.90, but their chances of reconquering it will be dramatically decreased.
Levels to keep an eye on:
D1: 79.93 76.02 77.51
H4: 73.90 74.96 75.33
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