The Australian dollar versus the US dollar currency pair seems determined to conquer the 0.6500 level. Might this be the preparation for a bearish movement?
After retracing from the 0.5511 support level, the price confirmed the support of 0.6015. That confirmation etched a rally that peaked at 0.6446 and then retraced to the 0.6313, confirming the latter as support.
The development that took place from 0.6015 could repeat from 0.6313. As a consequence, this could lead to the piercing of the 0.6500 resistance, and, from what it can be seen, the first step towards this direction has already been made, the rally from the 0.6250, respectively.
So, the first scenario is the one in which the price pierces the 0.6500 psychological level. After the level is confirmed as support, the bulls should have enough confidence to drive the price to the double resistance made possible by the upper line of the descending channel and the 0.6700 psychological level. Of course, the 0.6600 psychological level — not highlighted on the chart — is an intermediary target.
The second scenario, the one in which 0.6500 keeps its role as resistance — either by a direct confirmation or by a false break — may lead to range trading limited by 0.6500 and 0.6313.
The price returned inside the ascending channel in which the price stayed since the second half of March. This happened after the end of the consolidative phase that started on April 14. Its completion took place via the confirmation of the double support made possible by the upper line of the descending channel and the 0.6363.
The bulls now eye the 0.6600 level. This may come in the form of an upwards movement that, slowly but surely, conquer 0.6497m followed by 0.6556. Also, another possibility is for a throwback towards 0.6363. After 0.6363 is confirmed as support, the rally to 0.6600 may be put in motion by the bulls.
Only if 0.6363 is rendered as resistance, then the next target becomes 0.6231.
Levels to keep an eye on:
D1: 0.6500 0.6700 0.6313
H4: 0.6497 0.6556 0.6600 0.6363 0.6231
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