The Australian dollar versus the US dollar currency pair seems to have conquered 0.7320. Do the bears have any plans?
The rally that started at the 0.5700 low managed to fuel a very convincing upwards movement. Along the way, the rise validated important levels as support.
However, because the last one, 0.7191, was not taken that much into consideration by the price action, the market participants could have argued that the consolidation phase that started towards the conclusion of July, signals potential bullish tiredness.
But the overall trend imprinted its influence, as the next momentum unveiled towards the north. As a result, the bears now know that they may have to wait a little longer for their turn.
So, as long as the price trades above 0.7320, the bulls could resume their march towards higher prices. This may come after a short consolidation period — like a flag or pennant — or after a false piercing of 0.7320. Of course, this opens the door to 0.7587. Noteworthy is that, even if they are not highlighted on the chart, the 0.7400 and 0.7500 psychological levels serve as intermediary bullish targets.
On the flip side, if 0.7320 cedes, then 0.7191 could attenuate the fall and, thus, give the bulls yet another chance to continue the rise. But if 0.7191 is validated as resistance, then the situation turns neutral and may allow a depreciation until 0.7010.
The ascending movement extended until the 0.7381 high, after piercing and departing from 0.7236 in a very determined manner.
One scenario is the one in which the price consolidates around 0.7350, thus preparing the continuation of the appreciation in a relatively short while.
However, another scenario is for the price to throwback in order to validate the peak of 0.7256 as support.
These scenarios make possible the conquering of 0.7400 — not highlighted on the chart. But if the price falls beneath 0.7236, then 0.7170 might be revisited.
Levels to keep an eye on:
D1: 0.7320 0.7587 0.7400 0.7500 0.7191 0.7010
H4: 0.7236 0.7400 0.7170 the peak of 0.7256
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