The Australian dollar versus the US dollar currency dropped sharply, but there are some chances for the bulls.
The depreciation that started after the resistance area of 0.7055 and 0.7013, respectively, was confirmed caused a retracement from the 0.6500 mark. The retracement almost touched the 0.6700 level after a decline that reached the 0.6313 level. However, what followed was a strong depreciation, one that managed to pierce 0.6313.
One possible scenario is to see the price consolidating around 0.6150. Given the high volatility, flags and pennants are out of the question, but more ample chart patterns, such and rectangles or triangles, may take shape.
Another unfolding is the one in which the price makes a throwback towards the double resistance etched by the level of 0.6313 and the lower line of the descending channel. If the price manages to confirm 0.6313 as support and close a dat above the line of the channel, then the bearish scenario is invalidated, but until then this remains a probable resistance area that may cause further decline after is is confirmed.
For both scenarios, the main profit taking area is represented by the level of 0.6015. On the other had, if the bulls conquer 0.6313, then 0.6500 is their target.
The price declined after forming the high of 0.6684 that almost touched the resistance of 0.6705. The downwards movement extended to as low as 0.6095.
As long as the price oscillates beneath the trendline, every resistance is a possible strong bearish area. As a consequence, it can be considered that the price is limited in a flat, lined up by the resistance of 0.6231 and the low of 0.6095, and that the upper boundary of this flat is packed with sellers. So, every visitation of this level could end up as a leg down, extending to the previous low, at 0.6095.
Even if the bulls conquer 0.6231, the price still is under the trend line and, as a result, in bearish territory.
Only if the bulls manage to conquer 0.6363, then it can be considered that the next target is 0.6497.
Levels to keep an eye on:
D1: 0.6313 0.6015 0.6500
H4: 0.6231 0.6363 0.6497 and the low of 0.6095
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