The Australian dollar versus the US dollar currency pair succeeded in getting back above the important level of 0.6313. Could the bears be just around the corner?
After the retracement form the 0.5911 level, the price went past the 0.6015 level, extending two thirds between 0.6015 and 0.6313. After that, a correction came into being, one that found support at 0.6015. This confirmation led to an appreciation that managed, on a single run, to get above 0.6313.
Given the strong retracement and the fact that the bulls conquered an important level, the profile is, of course, bullish. However, such a rally requires a pause, so that the bulls can catch their breath and park their profits, respectively. This translates into a consolidation phase that unfolds above the 0.6313 level. It is possible to see the bears testing the strength of the bulls. In other words, during the consolidation, a false break of 0.6313 cannot be ruled out.
Another scenario is the one in which the bulls extend a little bit more above the 0.6313 level, and then make a throwback to confirm it as support and thus start a new movement towards the north.
In both cases, the psychological level of 0.6500 is the first target, with 0.6700 following.
After etching the low of 0.5506, the price entered into an ascending trend that is now consolidating just under the short term resistance of 0.6363.
One possibility is to see the price printing a low, one that stops at the inner (more abrupt) trendline. If this happens, then the resulting upwards movement can take out 0.6363, confirm it as support and then go for the next target, 0.6497.
But if the trendline fails, then the next support is 0.6231. Yet as long as this double support — comprised of the outwards trendline and the 0.6231 level — holds, further advancements are to be expected.
Of course, the piercing of 0.6231 followed by a confirmation as support of the outwards trendline is one development that can take place. In this case, once the price gets back above 0.6231, the first target will be represented by 0.6363, while the second by 0.6497.
Only if the aforementioned double support gives way, then 0.5971 becomes the main target.
Levels to keep an eye on:
D1: 0.6313 0.6500 0.6700
H4: 0.6363 0.6497 0.6231 0.5971
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