The Australian versus the US dollar currency pair failed to conquer the 0.7191 resistance level. Is this a sign of the bears getting stronger?
The rise that came about after the retracement from the rooted 0.5516 support level extended all the way to the 0.7227 high.
What draws attention is that the 0.7227 high — as of writing — is part of the false piercing which formed above the 0.7191 firm area. In itself the relevance of this event could be overlooked. However, the fact that the 0.7191 level is a significant one catches the eye.
Moreover, the bullish failure came in two parts. First, on July 30, a hanging man candlestick pattern was printed on the chart, sending the message that the appreciation may either pause or reverse. And, as on July 31, the market impressed a bearish engulfing, the participants could think that the reversing variant could be the one playing out.
So, unless the bulls manage to take out the 0.7227 high, the bears could very well progress with their plans. Of course, if 0.7227 is invalidated, the price would have already gotten above the 0.7191 level. And this brings the bulls closer to the possibility of confirming it as support — as the oscillations above it, anticipate an easier validation. This opens the door to 0.7320.
On the other hand, if the bulls are not able to continue their movement towards the north, then the bears would target the 0.7010 important area.
The appreciation from the 0.6832 low, went all the way to 0.7227. But as the price fell under two previous higher highs — 0.7183 and 0.7169 — it seems that the bulls have a hard time progressing.
If the bulls succeed in conquering 0.7170, then they could head for the psychological level of 0.7300 (not highlighted on the chart). But if 0.7170 stays as resistance, then the price could fall towards the next possible support, the intermediary level of 0.7081.
If the bulls cannot start a strong rally from 0.7081, then 0.7002 is exposed.
Levels to keep an eye on:
D1: 0.7191 0.7320 0.7010
H4: 0.7170 0.7300 0.7081 0.7002
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