The Australian versus the New Zealand dollar currency pair made a surprise shift in direction. Is this only a temporary development?
The rise that started after the validation of 1.0013 as support extended until the 1.0880 high.
From that peak, the price retraced under the 1.0826 level, rendering it as a false piercing.
After the bulls regained their strength, they started a new surge from the 1.0566 low, not only recapturing the 1.0707 level, which has been taken out by the bears in the fall from 1.0880, but also conquering 1.0826.
Now, with 1.0826 out of the way, the bulls could concentrate on their next target, 1.0983. Yet again, a high was printed — 1.1043 — and the fall beneath a just succeeded level — 1.0983 — repeated.
However, this time the next support, 1.0826, held and, thus, fueled a new emergence. But this bullish enthusiasm was put to its place by the 1.0895 intermediary level. As a result, the price went beneath 1.0826, crafting the 1.0717 low.
Moreover, the refreshed bullish attempt from the 1.0717 low was not a success, as the price slipped under 1.0826 after what could have been a promising impulsive swing.
Now, as the price trades under the double resistance made up by 1.0826 and the upper line of the descending channel, the expectations are for the bears to continue pushing the price towards 1.0707.
Only if the bulls accomplish to conquer 1.0826, then 1.0983 could play as their next objective.
From the 1.0936 high, the price extended to as low as 1.0717. From there, an appreciation commenced, one that defined the 1.0894 high.
However, the drop that followed shows definite bearish strength. So, one possible scenario is for a short-term consolidation pattern — such as a pennant or a flag — to take shape under the intermediary level of 1.0778.
Another scenario is a rise that validates 1.0820 as resistance. Both scenarios aim for the 1.0741 intermediary level.
But if the bulls do win 1.0820, then 1.0866 is in reach.
Levels to keep an eye on:
D1: 1.0826 1.0707 1.0983
H4: 1.0778 1.0820 1.0866
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