The Australian dollar versus the US dollar currency pair seems to have some trouble heading towards the north. Is this a sign of a bearish comeback?
The appreciation that started from the 0.7501 low, after the level of 0.5516 was validated as support, managed to pass the important resistance area defined by the level of 0.6386 and the descending trendline. This aided the extension of the appreciation until the 0.7041 high.
However, even if the ascending trendline supported the price for as long as possible, the appreciation seems to be out of power, as the rally attempts were either turned in their tracks or decelerated.
As a result, the ascending trendline was pierced. Noteworthy is to mention that this happened after the price was, yet again, turned away from the 0.7010 firm level.
In this case, the bears could be entitled to believe that it is their turn to drive the market. So, if they send the price to the 0.6873 intermediary level, then they would have won the first battle.
But for an actual trend change to occur, they have to validate 0.6873 as resistance. If this happens, then the 0.6722 level is their next stop. This could also be an area from where the bulls could start a comeback.
If 0.6722 does cede, then the bears can put the 0.6386 level as their main destination, at least for the time being. On the flip side, if the bulls do manage to conquer and validate 0.7010 as support, then the 0.7191 level would serve as their target.
The price oscillates limited by the resistance of 0.7002 and the ascending trendline that starts from the 0.6776 low.
If the bulls manage to hold on to the 0.6949 intermediary level and confirm it as support, then they could take on the next stage of their plan, validating 0.7002 as support, respectively.
But even if 0.6949 is, yet again, passed, as long as the low of 0.6923 is not taken out, the bulls still have a chance. Still if the low is taken out, then the price could reach the double support area defined by the 0.6889 level and the ascending trendline. From here, the bulls can challenge once more the 0.7002 level. But if this area fails, then the 0.6816 intermediary level is exposed.
Levels to keep an eye on:
D1: 0.6873 0.6722 0.6386 0.7191
H4: 0.6949 0.7002 0.6889 0.6816 and the low of 0.6923
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