The Australian versus the New Zealand dollar currency pair seems to have been very reluctant in crafting any significant lows. Is this a sign that the bears are not that determined?
The appreciation from the 0.9991 low, which confirmed the firm support area of 1.0013, managed to extend until the 1.1043 high, printed some peaks above the significant 1.0983 resistance level, and retraced under it. Thus, it gave a sign that the bulls are not yet ready to take this step.
Along this path, from the 1.0880 to 1.0566, a correction phase was inscribed on the chart. Thanks to it, an ascending line may be outlined by joining the 0.9991 and 1.0566 lows.
As the price depreciated from the 1.1043 peak, after falsely piercing the 1.0983 level, it attempted to find support in the inner ascending trendline, the one that starts from 1.0566, respectively.
But the bears, at least this time, wanted to remind the bulls that they are market participants as well and, if it is the case, they can pull some strings. As a result, the inner trendline was invalidated.
Nevertheless, the price finds itself in front of a double support area, defined by the outer trendline and the firm 1.0826 level. If this area gets validated, then the bulls — in a first instance — may send the price back to 1.0983. Also, if the latter is validated as support, then the appreciation has room to stretch to the 1.1078 intermediary level.
However, if the aforementioned double support area cedes, then the bears could drive the price to 1.0707.
The ascending movement that began at the 1.0717 low prolonged until the 1.1043 high, being stopped in its tracks by the firm 1.1030 resistance area.
From there, a consolidation phase took shape, one which seemed to had found support at 1.0921. However, the 1.0960 high marked a turning point, the moment when the bulls did not have sufficient power to overcome the bearish defenses, respectively.
The result is a decline that went beneath the 1.0866 potential good supportive area.
So, if the bulls can regain 1.0866, then they could march towards 1.0921, and once this level is conquered as well, then they could aim for 1.1030, with 1.0987 as an intermediate profit booking area.
On the flip side, if 1.0820 is validated as resistance, then the fall could continue, with 1.0778 and 1.0741 serving as bearish targets.
Levels to keep an eye on:
D1: 1.0826 1.0983 1.1078 1.0707
H4: 1.0866 1.0921 1.0987 1.1030 1.0820 1.0778 1.0741
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