The Australian dollar versus the United States dollar currency pair is getting very close to the 0.7010 level. Do the bulls still have enough traction to continue?
The depreciation that started from the 0.7019 high, after the major 0.7010 level was confirmed as resistance, extended until the 0.5701 low. From there a strong rally commenced, one that confirmed the double support made possible by the descending trend and the 0.6386 level.
The confirmation fueled the continuation of the appreciation. In this process, the important level of 0.6722 was conquered and the ascending trend that starts after the confirmation as support of the 0.5978 intermediary level was further enforced.
However, the only bearish argument is that the bulls pierced 0.7010, printing the high of 0.7064, and later on retraced under the level. But, the bullish counterargument for this is the confirmation as support of the ascending trendline.
In this context, the first scenario is the one in which the price gets above 0.7010 and confirms it as support. If this happens, then the bulls can aim for 0.7191. But if the bears invalidate the support trendline, then they can postpone further movements towards the north. This scenario can take the form of a consolidation that sits on the 0.6873 intermediary level or a throwback to 0.6722. Only if 0.6722 gives way, then the price could continue falling.
From the low of 0.6832, an ascending movement began, on that established its supportive trendline as the one that starts from the low of 0.6877.
Since the bulls were able to break above the intermediary level of 0.6949, they now have to possibility to continue marching towards their next target, 0.7002.
This may come as a continuation of the current development or after the confirmation of the double support defined by the ascending trendline and the 0.6949 intermediary level. Only if the price falls under this area, then the bears could pursue to extend the movement to 0.6889.
Levels to keep an eye on:
D1: 0.7010 0.7191 0.6873 0.6722
H4: 0.7002 0.6949 0.6889
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