The Australian dollar versus the New Zealand dollar currency pair seems to draw a falling wedge. Is this, finally, the moment the bears have been waiting for?
The rally that started at the 0.9991 low, after the 1.0013 level got confirmed as support, evolved until the peak of 1.0880, but did not manage to validate 1.0826 as support, despite oscillating above it.
From there, the price retraced under the firm support of 1.0707. However, with this occasion, the level abandoned its supportive role, allowing the price to fall until the 1.0632 intermediary support.
Even if the bears extended the decline until the 1.0582 low, the bulls were able to bring it back above the intermediary level and even above 1.0707, but only for a short while, as the price retraced under the latter.
The support line of the ascending movement which forms the last part of the ascension from 1.0013, alongside with the steeper trendline that starts from 1.0582, limits what could turn out to be a rising wedge.
So, if the bulls are not bringing the price above 1.0707 very shortly, then the bears could argue that, because the price sits at the possible double resistance defined by the 1.0707 level and the steeper ascending trendline, the market is in their favor.
If this happens and the described area indeed plays out as resistance, then the bears’ first stop would be 1.0631, followed by 1.0551. On the other hand, if the bulls perform and 1.0707 becomes support, then they could reach 1.0826.
The depreciation that started at the 1.0880 peak ended at the 1.0582 low, from where and ascending movement began.
The bulls have the chance to confirm 1.0681 as support. If they manage to, then 1.0741 could serve as their first target, followed by 1.0778 and eventually 1.0820.
However, if they pass the ball to the bears by allowing the price to flip under 1.0681, then the bears could push the price further down, targeting 1.0621 and then 1.0573.
Levels to keep an eye on:
D1: 1.0707 1.0631 1.0551 1.0826
H4: 1.0681 1.0741 1.0778 1.0820 1.0621 1.0573
If you have any questions, comments, or opinions regarding the Technical Analysis, feel free to post them using the commentary form below.