The Australian dollar versus the US dollar currency pair is under bearish pressure. Is it just a matter of time for them to win?
The ascending trend that started from the 0.5701 low seems to have ended at the 0.7064 peak, as the support trendline got pierced. However, the bulls are hesitating on letting the bears have easy success.
But as far as the bulls are concerned, they are still in advantage, even if at first glance the situation does not quite look like so.
The reason behind this view is that the price oscillates — way — above the major support of 0.6722. In other words, even if the ascending trendline ended, the fact that the price finds itself above 0.6722 renders the situation as one favorable for the bulls, which means that every retracement of the price towards lower values is only embraced by the bulls, as they get to join the market at a better price.
So, if the 0.6873 intermediary level does get confirmed as resistance, then the price would have room to maneuver until the solid support of 0.6722, from where a densely packed bullish contingent is ready to long the market at an attractive price and from a solid area. In this case, besides 0.6873, the bulls will target 0.7010.
Only if the bears are validating 0.6722 as resistance, then they could aim for 0.6386, with 0.6623 and 0.6553 standing as intermediary targets.
The price could be sitting in a possible bullish wedge formation, with the price already attempting to fulfill the pattern’s message, as it pierced the resistance trendline that starts from 0.6974.
If the bulls manage to validate 0.6889 as support, then they can extend until the 0.6949 level. If they fail to do so, then the bears could direct the price towards the 0.6840 low, from where the bulls have yet another chance.
Even if the low fails, the fall may be cushioned by 0.6816. Only a fall under this level could trigger a sustained sell-off that, in the light of those discussed for the long-term perspective, targets 0.6722.
Levels to keep an eye on:
D1: 0.6873 0.6722 0.7010 0.6386 0.6623 0.6553
H4: 0.6889 0.6949 0.6816 and the low of 0.6840
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