The Australian versus New Zealand dollar currency pair seems to be willing to steer towards the north. Are the bears going to allow this?
From the 1.0566 low, the price entered into an ascending phase, one that would bring the formation of the 1.1043 high.
Even if the bulls were determined, they were overpowered by the bears. So, they sent the price beneath the 1.0983 level that the bulls were targeting for validation as support.
As a result, the price ebbed until the ex-resistance of 1.0826, which, for a relatively brief period, fueled the bullish dreams, seeming to serve as support.
However, with the first occasion, the bears confirmed the intermediary level of 1.0895 as resistance. In other words, on September the 14th, the price went and closed beneath the intermediary level, jeopardizing the bullish plan.
The following days the bulls saw the undesired unfolding, as the price slipped under the firm resistance of 1.0826, washing away their previous gains and efforts.
This is how the current descending trend came into being. As of writing, it extended until the 1.0418 low. Along its path, the price pierced significant levels, like 1.0707 and 1.0551, respectively.
However, now the bulls are striving to retake 1.0551. So, if the double resistance defined by the 1.0551 level and the upper line of the falling channel resists, then 1.0474 is the next target. On the flip side, if the double resistance cedes, then 1.0631 is the next bullish stop.
From the 1.0761 high, the price extended to as low as 1.0418, in a falling trend, as the series of lower highs and lows points out.
However, by observing the chart, one could see that 1.0568 is a higher high when compared to the previous high at 1.0562.
Even more, the 1.0472 and 1.0516 lows could be the shoulders of an inverted head and shoulders pattern with the head defined by the 1.0414 low and the neckline noted by the 1.0573 intermediary level.
So, if the chart pattern plays out, of course, after 1.0516 is validated as support, then 1.0621 is the main bullish target.
However, if 1.0516 cedes, the right-side shoulder could extend to the 1.0481 level.
Levels to keep an eye on:
D1: 1.0551 1.0474 1.0631
H4: 1.0516 1.0573 1.0621 1.0481
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