The Australian dollar versus the US dollar currency pair intruded the resistance trendline of the descending channel but stopped into an important resistance area. How does that impact the evolution of the upcoming period?
Long-term perspective
After confirming the 0.6700 level as support, the price oscillated in such a manner that, eventually, managed to pierce the upper trendline of the descending channel. Of course, this can frankly be considered as a positive sign for the bulls.
But the advancement seems to have stopped in a rather unfortunate area, the strong resistance of 0.7013, respectively. So, given that the appreciation was not able to break the wall that 0.7013 and 0.7055 is, the bears may very well be entitled to believe that the bullish spark ran out.
An interesting thing can be pointed out if considering the higher highs. If 0.6929 and 0.6938 are taken together, then one could consider the market as bullish simply because the latter high is a higher high.
But the actual difference between them is slim. Even more, 0.6938 is followed by an exhaustion movement that — coincidence or not — stopped at an important resistance area — the aforementioned wall.
Given these variables, the bears are expected to keep — an increase — their gains. A first target may very well be 0.6850, but the 0.6800 serves as the main one. The movement can extend further, thus reaching the 0.6700 psychological level.
Even if the previous peak — 0.6938 — or the 0.6850 level are confirmed as support, a conservative approach would require waiting for 0.7055 to turn to support in order to long the market.
Short-term perspective
The market is in an ascending movement and will remain like so as long as the price oscillates above 0.6933. So, if 0.6933 is confirmed as support, 0.7003 may be paid a visit.
But if the price confirms 0.6933 as resistance, then 0.6855 represents a first target, being followed by 0.6746.
Only if 0.7047 is confirmed as support, then the bulls may have reasons to expect further developments towards the north. Otherwise, the appreciation in the event of price not piercing 0.6933, may very well be considered by the bears a good opportunity to join the endeavor towards the south at an even better price.
Levels to keep an eye on:
D1: 0.6850 0.6800 0.6700 0.7055
H4: 0.6933 0.7003 0.6855 0.6746
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