The Australian dollar versus the US dollar currency pair seems to be part of both bullish and bearish sides. But on which side is it, actually?
After printing the head and shoulders pattern marked by the highs of 0.6938 and 0.6933, respectively, the price dropped under the major support of 0.6850.
By doing so, it also re-entered the descending channel, which fueled the decline even more. As a result, the price reached the area of the 0.6700 psychological level.
But in this area, a very interesting string of events occurred. The price initially pierced the 0.6700 support level and printed the 0.6678 low.
From there, it strongly retraced and etched the 0.6774 high. At this point, it could have been considered that the break of 0.6700 was a false one.
However, this conclusion was turned around after the price depreciated yet again and got back beneath 0.6700, surpassing the previous low, thus crystallizing a new one at 0.6662.
And, to make it even more complicated, it then got back over the level, but under the previous high.
This behavior makes the situation very confusing. But the fact that the market printed lower highs and lower lows, points to the fact that the bears are the ones in control.
So, as long as the previous high — 0.6750 — is not taken out, the profile remains bearish, targeting the next psychological level, 0.6600, respectively — not highlighted on the chart.
Of course, if the previous high does get taken out, then the bulls may get their chance to retest the 0.6800 resistance level.
The price is contained in a sideways movement that is limited by the 23.6 and 0.0, respectively, Fibonacci levels. It also has an intermediary level at 0.6705.
As long as 23.6 does not get confirmed as support, further decline is to be expected, 0.0 being the main focus.
Otherwise, 0.6705 is expected to become resistance and facilitate the aforementioned decline.
If 23.6 becomes support, then 38.2 will shift to being the main attraction for the buyers.
Levels to keep an eye on:
D1: 0.6700 0.6600 0.6800
H4: 0.6705 and The Fibonacci levels of 0.0 23.6 38.2
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