The Australian dollar versus the US dollar seems not to be profiting from the appreciation opportunities. Is this a sign that the bears are preparing the next movement?
The rally that started from the 0.5701 low, after the confirmation of 0.5516 as support, pierced the descending trendline that starts from 0.7034, and extended all the way to 0.6616.
Subsequently, the price entered a consolidative phase, limited by the important level of 0.6386 and the intermediary level of 0.6553. So, as long as the consolidation lasts, both bulls and bears have the opportunity to profit from oscillations of the price within the described boundaries.
But, if the price gets beneath the support of 0.6386 (with or without another run towards 06553), then a double top (or triple top, respectively) could be in place. If this happens, then the price could revisit the double support etched by the descending trendline along with the 0.6274 level. If this latter area fails to play the role of a support, then the price could resume the falling movement (that is, get beneath the trendline market by 0.7034), which would open the door to 0.5978.
On the other hand, if 0.6535 gives way, then the next bullish target would be 0.6722, with an intermediary profit booking area at 0.6647.
The price is in a range surrounded by 0.6559 as resistance and 0.6739 as support. Also, the support trendline (the ascending one) has been invalidated, but as the bulls are not willing to give up without a fight, the bears need a resistance to confirm, so that they can have a starting point for a new leg down.
Such a zone can be offered by the confluence area of both ascending and descending trendlines which, if confirmed by the bears, could send the price past the 0.6379 support. If this happens, then the bears could send the price towards 0.6251, and possibly extend to 0.6191.
But if the bulls validate the potential double resistance (the intersection of the trendlines) as a support, then they could aim for 0.6559 and then head to 0.6660.
Levels to keep an eye on:
D1: 0.6386 0.6274 0.6183 0.5978 0.6647 0.6722
H4: 0.6379 0.6251 0.6151 0.6559 0.6660
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