The Australian dollar versus the United States dollar currency pair conquered the 0.7000 psychological level. But is this truly a bullish victory?
The retracement from the solid support of 0.5516 managed to stabilize above the double resistance area defined by the 0.6306 level and the descending trendline that starts from the 0.7019 high.
After this, the bulls headed for their next target, 0.7000, an old but important area, and also a psychological level. In their way towards their objective, the bulls noted and the chart a very convincing ascending trend.
Of course, the bears were not going to give up without a fight, as the marks of that were recorded by the 0.7064 high when the bears posted around the 0.7000 level put a lot of pressure on the price as it touched it. The result was a strong drop that went beneath the 0.6873 intermediary level.
But the bulls handled the situation very swiftly, not permitting further losses, rotating the price towards 0.7000, and pressuring it until the level gave way, defeating the bears — at least for now — and extending a hair away from the firm level of 0.7191.
As long as the price oscillates above 0.7010, the bulls can continue their movement towards the north. The first target is 0.7191, which has to be pierced and validated as support in order for the movement to continue.
Only if 0.7010 fails to serve as support, then the bears could bring the price back to 0.6873.
The ascending trend that started from the 0.6832 low accelerated. This came as a required action from the bullish side, to counter for the bears sending the price back beneath 0.7002 after the bulls printed the 0.7037 high.
So, to brush the bears aside, the bulls went for a rally that not only pierced the intermediary level of 0.7081 but also touched the firm 0.7170 level, noting the 0.7183 high.
One possible scenario is for a sideways movement to commence, one limited by 0.7081 as support and 0.7170 as resistance. Of course, further push towards the downside cannot be ruled out, as the bulls might be looking for a strong support to confirm, one like the one crafted by 0.7002 and the ascending trendline that starts from the 0.6832 low.
But even if this area is invalidated, beneath it lies another one, marked by the 0.6949 intermediary level and the ascending trendline that begins for the 0.6776 low (the low is not shown on the chart).
Levels to keep an eye on:
D1: 0.7191 0.7010 0.6873
H4: 0.7081 0.7170 0.7002 0.6949
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