The Australian dollar versus the Canadian dollar currency pair seems to be in a bullish profile. But is it really so?
After peaking at 0.9149, the price began a strong depreciation, one that was able to pass the 0.9010 level with ease.
The movement stopped at the 0.8918 support, from where the price retraced drastically, recovering almost half of the losses and also looking as if it is trying to conquer the 0.9010 level.
But the bullish plans seem to be shadowed by a shooting star pattern, portrayed by the candle on January 13. On one side, the pattern in itself is a bearish one and, being placed at a possible resistance, 0.9010, respectively, the bears receive the credit. On the other hand, the candle closed above the 0.9010 technical level and also above its psychological correspondent, that being 0.9000. This matter could confine further bearish attempts.
But, as long as the shooting star is not invalidated, the profile remains bearish. An invalidation would occur if the price oscillates above the high of the candle, 0.9032, respectively — not highlighted on the chart.
Given these variables, as long as the pattern remains viable, the expectations are for the bears to push the prices lower, 0.8918 being the first target. Only if the price begins a depreciation but gets stopped in its tracks, then 0.9010 may be confirmed as support. If this scenario materializes or if the shooting star gets invalidated, then 0.9093 will serve as a bullish profit booking area.
The price is in an ascending movement, after confirming the 0.8923 support. It was able to extend above 0.8985 and print what could be an angled rectangle. Because the rectangle is preceded by an upwards pointing slope and because it usually serves as a continuation pattern, the expectations are for the appreciation to continue.
The first target for the bulls is represented by 0.9041. If this gets confirmed as support, then 0.9105 is the next area to be visited.
However, if 0.9041 does not get taken out, then 0.8985 may be pierced and thus the door to 0.8923 is open.
Levels to keep an eye on:
D1: 0.9010 0.8918 0.9093
H4: 0.9041 0.9105 0.8923
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