The Australian dollar versus the US dollar currency pair recovered but seems to have trouble passing the 0.6900 handle.
After confirming the support of the 0.6700 psychological level, the price entered in an appreciation phase that took out two important resistance areas, 0.6800 and 0.6858, respectively.
The breach of 0.6858 allowed the price to reach the 0.6925 high, thus piercing 0.6900 which an area that the bears are protecting — at least they are trying to. This attempt took the shape of the bearish pin-bar on October 31.
However, bears do not find themselves in good territory. A fist reason for that is the departure from 0.6858 — at the time of writing, the market is at 0.6897. The second one is that the price finds itself above the resistance line that can be obtained by joining the high of 0.6894 with the next lower high. Another observation to point out is that the aforementioned lower high served as support that the low of October 31 could not pass.
The only advantage that the bears have is that the bearish pin-bar — at the time of writing — was not yet invalidated. If November 1 closes around the or at a rate greater than 0.6929, then they would be left without any option until the resistance trendline of the descending channel.
So, considering the current variables, the first target is represented by 0.7013, with an intermediary target area in the form of the descending channel’s resistance.
The profile can be considered bearish only after the price confirms 0.6855 as resistance.
The price is in an upwards pointing trend, with each previous higher high serving as a support for the next leg up.
The upper green box — which overlaps the 50.0 Fibonacci retracement projection — may very well also serve as the next starting point for an appreciation that targets 0.7003.
So, as long as the market finds support — and has the choices of 0.6855, 50.0, and 38.2, respectively — 0.7003 is in reach.
Only if 38.2 is confirmed as resistance, then further declines towards 23.6 and the area of 0.6700 are to be expected.
Levels to keep an eye on:
D1: 0.6858 0.7013
H4: 0.7003 0.6855 Fibonacci retracement projections of 50.0 38.2
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