The Australian dollar versus the Japanese yen currency pair behaved as expected, as it appreciated from 0.8918 to 0.9039.
After printing the diamond that found support at 0.8918, the price rallied, piercing the 0.9100 psychological level that — beginning with late August — served as resistance and stopping at the 0.9093 level.
After such a rally, usually, the situation can unfold in two different manners. The first one takes the form of a consolidation — pennant, flag, flat, etc. — that, later on, will allow the price to continue the upward movement.
The second possibility is for the price to make a throwback and revisit an important support area. The most relevant area for such a scenario is the 0.9010 level, this event also changing the level’s role from strong resistance to that of strong support. Noteworthy is the fact that the false piercings of 0.9010 that took place during towards the end of August could also serve as areas that might offer the price a good place from where it could start a new movement heading north.
Only the passage of the price under the 0.9010 level and the confirmation of it as resistance can change the market profile to a bearish one that targets 0.8918. Otherwise, as long as one of the two previously discussed scenarios takes place, the price is expected to confirm 0.9093 as support and continue the march towards the main target of 0.9300. A pitstop may occur 0.9214, which serves as an intermediate profit taking area.
The price was limited by a flat with the 0.9041 level serving as resistance. The resistance was pierced and the price departed the pierced area, stopping at the 0.9105 technical correspondent of the psychological 0.9100.
Considering the current development, the price looks like is printing a symmetrical triangle, a chart pattern that — being a continuation pattern that is preceded by an upwards movement — signals the will of the bulls to continue the appreciation.
So, after the price pierces and confirms 0.9105 as support, the bulls are expected to bring it to the 0.9204 level.
Only if the 0.9041 level does not hold and gets confirmed as resistance, then the expectancies are for 0.8985 to serve as a bearish target.
Levels to keep an eye on:
D1: 0.9100 0.8918 0.9093 0.9214
H4: 0.9041 0.9105 0.8985
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