The Great Britain pound versus the Australian dollar currency pair extended above 1.9053. Is this the new direction or it’s just the bears preparing to short?
After starting at 1.7634 and extending until l.9470, the ascending trend was challenged by a strong retracement, limited between the 1.9522 high and 1.8651 low, respectively.
But the bulls guarded the support of 1.8742, facilitating an upward movement towards 1.9053. But the bears were not yet ready to give up, so another depreciation followed. However, it was limited by the same 1.8742 support area — actually, the bears did not even get the chance to touch the level again.
What came after was an appreciation that not only brought the price above 1.9053 but also printed a higher low — at 1.8766 — with respect to the previous low — at 1.8651 — and by doing so enforced the bullish profile.
Even more, the candle on January 21, is a strong bullish candle, and the candle that follows it already traded above its high, thus giving more credit to the buyers.
Given this context, 1.9470 is the main target. An appreciation in its direction will receive the green light after the high of 1.9155 is taken out, after the price oscillates above or confirms as support the 1.9053 level, or after 1.9053 is falsely pierced — the price going under it, but retracing rapidly above it once again.
Of course, along the way to the main target, other levels play the role of profit booking areas. They are the psychological levels of 1.9200 and 1.9300, respectively — neither of them are highlighted on the chart.
The price is in an ascending movement that was able to extend beyond 1.9047. As long as the price remains above it, the expectations are for the appreciation to continue, targeting 1.9346.
If 1.9047 does give way, the next support — at 1.8912 — may very well start a new upwards pointing leg, one that will check 1.9047 and aim for the same 1.9346.
In the event of 1.8912 not being able to withstand the bearish pressure, then the situation will turn neutral.
Levels to keep an eye on:
D1: 1.9053 1.9470
H4: 1.9047 1.9346 1.8912
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