The Australian dollar versus the US dollar currency pair is in a moment in which it has to decide where to go.
The appreciation from the 0.5517 support peaked at the 0.6572 high. By doing so, the swing that starts from 0.6250 extended and oscillated above the 0.6500 psychological level.
However, the price quickly ebbed under the 0.6500 level. By doing so, the bears are sending the message that they are willing to join the market.
Noteworthy is also the fact that the current low already went under the high of 0.6446, a reference point that could have served as potential support for a new rally.
All these could add to any advancement towards the north a selling flavor. In other words, any rally, as long as the price sits under the 0.6500 level, might be seen rather as a shorting opportunity than as the bulls riding the market.
So, one possible scenario is to see a climb from the psychological level of 0.6400 — not highlighted on the chart — until the 0.6500 level. This could also happen after 0.6300 is tested as support. If the price falls, yet again, to confirm 0.6500 as support, then the bears could develop a strong decline, one that targets 0.6300 on the first run, followed by 0.6015.
On the other hand, if the bulls manage to record a high that takes out the 0.6572 peak, then the confirmation of 0.6500 as support would be more plausible and, if it happens, it could pave the way to the 0.6700 level.
The price pierced the trendline of the ascending movement that started from the 0.5988 low. This event also brought about the invalidation of the 0.6444 support level.
This disappointment from the bullish side is all it takes for the bears to kick further depreciation in motion. So, if the price confirms 0.6444 as resistance, then it could reach 0.6363, followed by 0.6231. The same targets are valid even in the event of an appreciation that reaches the double resistance of 0.6497 with the trendline if the double resistance gets confirmed.
Only the change of the area from double resistance to double support may aid further bullish advancement, targeting 0.6556 and, if 0.6556 gets pierced and confirmed as support, the psychological level of 0.6600.
Levels to keep an eye on:
D1: 0.6400 0.6300 0.6500 0.6015
H4: 0.6444 0.6363 0.6231 0.6497 0.6556 0.6600
If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.