The Great Britain pound versus the Australian dollar currency pair seems to have already been conquered by the bears. Are the bulls left with any chances?
The appreciation that started at 1.7634 may have already ended at 1.9470, as the price was repelled in a very strong manner. Even less beneficial for the bulls, the depreciation that came after 1.9470 was confirmed as resistance washed away most of the gains that were made by the candle on December 13.
Given this, mainly two possibilities can unfold. The first one is for another upwards pointing swing to emerge, one that will not extend that much and, in the end, alongside with the two previous highs — 1.9522 and 1.9389, respectively — draw a head and shoulders pattern with a neckline at 1.9053. In this case, the first profit taking area is represented by 1.8742, the second one being served for 1.8457.
The second possibility is for 1.9053 to hold, guarding its role as support. In this case, a flat may form, one limited by the support of 1.9053 and the resistance of 1.9470. In this latter scenario, the bulls might receive the chance — and time — they need in order to further push the prices to the upside. The reason for such an expectation can be ascribed to two factors. The first one is that the support of 1.9053 is a very strong one and, if respected, will boost the bullish morale. The second one is that the flat can serve as a continuation pattern and, because it is preceded by an appreciation, what should follow is also an appreciation. So, the bulls will be very determined to keep their profits. But, for the time being, 1.9470 is the target level.
The depreciation that started after 1.9487 was confirmed as resistance is testing the 1.9047 level. If the price will manage to confirm it as support, then another rise towards 1.9346 is to be expected.
If it fails to do so, then 1.8912 is the first target. As 1.8912 is a very important level, the reaction of the price in this area will be decisive. If it is confirmed as support, 1.9346 is the aim. If it is not, then 1.8732 will be a good bearish target.
Levels to keep an eye on:
D1: 1.9053 1.8742 1.8457 1.9470
H4: 1.9847 1.9346 1.8912 1.8732
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