The Australian dollar versus the New Zealand dollar currency pair is at the old weekly support of 1.0361. Will the bulls conquer it again?
The descending movement that started after 1.0837 was confirmed as resistance extended to as low as 0.9993, but, after confirming the weekly support of 1.0037, a strong rally began, one that now puts to the test the double resistance made possible by the 1.0361 level and the trendline that starts from 1.0865.
Considering that the rally could have been halted by two intermediary levels, 1.0191 and 1.0277, respectively, but that did not happen because of the strong bullish conviction, the profile can be considered as being bullish.
Irrespective of the buyer’s determination, the sellers would most certainly not give up without a fight to defend the aforementioned double resistance. This could go in either two ways.
The first possibility is to see the trendline being confirmed as resistance. This would cause the price to depreciate. However, the bulls will guard the, by then, sealed 1.0361 level. In turn, this may result in a confirmation as support of the 1.0361 level, a confirmation that will serve as a springboard for the next upwards leg and thus cause the trendline to be punctured.
The second scenario is the one in which the double resistance is confirmed and the price gets under 1.0361, but after doing so, the depreciation stops after a relative short advancement, only to get back above the level and, soon after, the trendline, thus invalidating the bearish confirmation.
Both scenarios aim for the next important area, 1.0530. Only if the price pierces the double resistance, departs from it, and then sharply falls under it, then the bears can say that they effectively succeeded in halting the bullish advancement. This could make of the 1.0277 and 1.0191 levels primary and secondary bearish targets.
The price is in an ascending movement from the 1.0222 low, after confirming the 1.0211 level as support.
As long as the price oscillates above the trendline, the bullish advancement is expected to continue. So, if the bulls confirm the 1.0368 level as support, then 1.0404 is the next target, followed by 1.0440.
But if the price falls under the double support etched by the trendline and the 1.0332 level, then the bearish target could be represented by 1.0282.
From 1.0282, the bulls could try another comeback. Only if 1.0282 gives way, then the profile would be a bearish one.
Levels to keep an eye on:
D1: 1.0361 1.0530 1.0277 1.0191
H4: 1.0368 1.0404 1.0440 1.0332 1.0282
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