The Australian versus the US dollar currency pair seems to have been taken by surprise by the bulls. Are the bears strong enough to defend 0.7320?
After the level of 0.6386 was validated as support, the price appreciated until the next firm resistance, 0.7010.
Following the consolidation phase that sits under 0.7010, the level was pierced, and the price continued the upwards movement until reaching the 0.7413 high.
From there, the price slipped under the 0.7320 level and confirmed it as resistance. As a result, the bears pushed the price until the yet to be confirmed support area of 0.7010.
As the bulls had the duty to actually confirm 0.7010 as support, after the piercing that followed the consolidation phase underneath it, they decided to finally honor it. This is how the appreciation on September 28 came about.
However, the rise did not accomplish the main objective, extending beyond 0.7320 and seal it as support. On the opposite, the price dropped back to 0.7010.
Still, the bulls remained determined, coining the low of 0.6991 and starting a rally that stopped at the 0.7337 high, thus failing once more to conquer 0.7320.
So, even if the bulls have set an objective, they have a hard time filling it, as the bears seem to be in hold of the situation.
As a consequence, as long as 0.7320 remains resistance, 0.7191 is the first bearish target, followed by 0.7010.
On the flip side, if the bulls do manage to pierce 0.7320 and validate it as support, then they have an open path to 0.7587.
From the level of 0.7002, after etching the low of 0.6991, the price set in an ascending movement, one that reached the 0.7341 intermediary level.
However, from there, the price retraced, falling beneath 0.7294. After another failed attempt to win 0.7297, the bears extended the depreciation until the 0.7236 area, but the bulls heavily defended it, sending the price back towards 0.7294.
As long as 0.7294 remains resistance, 0.7236 giving way is just a matter of time, with 0.7170 being the primary bearish objective.
On the other hand, if 0.7294 is conquered, then 0.7341 may be paid a visit.
Levels to keep an eye on:
D1: 0.7320 0.7191 0.7010 0.7587
H4: 0.7294 0.7236 0.7170 0.7341
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