The Australian dollar versus the New Zealand dollar currency pair is in a consolidation phase that might very well set up the path for 1.0900.
After the low printed at 1.0263 that rendered the piercing of the weekly 1.0361 support as a false one, the price rallied and reconfirmed important support levels, the relevant ones being the monthly 1.0530 and the local 1.0689.
The rally paused after 1.0837 was confirmed as resistance. This was followed by 1.0689 being confirmed as support, and as a result, the market entered a flat limited by the two.
The correction phase in itself shows an interesting behavior. The lows are concentrated around the 1.0689 level, while the highs present themselves as lower highs. This could point to the conclusion that the bears are taking over. But, first, after such a rally — from an important level, like the weekly of 1.0361 — the bears would have a hard time overcoming the bullish enthusiasm. Secondly, October 30 printed a higher high, which washed away the bearish expectations of reaching 1.0640.
In this context, the natural development is for the bears to find support from where they would start a new upwards leg. For aggressive traders, this is represented by 1.0750 (not visible on the chart), while the conservative ones would wait for 1.0837 to be pierced and confirmed as support. For both scenarios, the first area of interest is the psychological 1.0900.
The price was stopped on its tracks by the 1.0807 psychological level. As a consequence, the bulls might reload around the 1.0709 support or the 1.0750, as discussed for the daily perspective — not visible on the chart.
If 1.0709 is pierced and confirmed as resistance, then the price might revisit 1.0635, which represents an aggressive bearish opportunity. However, if this happens, the bulls might be interested to go long from 1.0709, after it is confirmed as support, a first target being 1.0807.
Levels to keep an eye on:
D1: 1.0837 1.0900 1.0689 1.0530
H4: 1.0807 1.0709 1.0635
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