The Australian dollar versus the Japanese yen currency pair seems to be at the boundary that separates the bullish and bearish territories.
From 71.09, the price is in an ascending trend that peaked at 75.67, from where a corrective phase emerged.
The correction extended until 73.35 but retraced above the 73.93 level thus rendering the pierce as a false one. This should have instilled sufficient optimism for the bulls to be able to start a new leg to the upside.
Instead of starting a rally, the price went — yet again — under the 73.93 support and printed three candles — November 21, 22, and 25, respectively — that closed under the level. Such behavior gives credit to the bears, for limiting any bullish attempts.
On the other hand, the fact that, after the 74.31 peak, the candles tend to reduce the length of their body and change from bearish to bullish translates into a loss of selling pressure.
Because the bears are losing steam and the price is at a support level, the bulls could try once more to drive the prices higher, and this time they could succeed. But for such an unfolding, the price must close one candle above 73.93.
As of 08:00 GMT, the daily candle has a small body, is under the 73.93 level, and extends with an upwards tail above the aforementioned level. If the situation continues like this, further movement to the downside is to be expected.
So, if today crystallizes a bearish profile, the 71.09 support will serve as a target, with an intermediate point at the 72.00 psychological level.
But if from the area of 73.93 any bullish price action takes place, then 76.02 is exposed.
After confirming the 75.62 resistance, the price depreciated and — relatively shortly after — began a consolidation phase that took the shape of a symmetrical triangle.
Such a chart pattern leads to the continuation of the movement that precedes it. As a consequence, after the support of the triangle got pierced, further decline was to be expected.
But instead, the price retraced and then printed higher highs alongside the support of the triangle, which played the role of a resistance trendline. Such a development renders the triangle as invalid.
After 73.90 is reconquered by the bulls, the price is expected to revisit the 74.96 level.
Levels to keep an eye on:
D1: 73.93 71.09 72.00 76.02
H4: 73.90 74.96 73.10
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