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Bulls Still to Let Go on AUD/USD from 0.6873

June 22, 2020 at 7:50 by Dorin Rosu

The Australian dollar versus the US dollar currency pair seems to be under bearish pressure, but the bulls are keeping up. So, is this only a delay in the fall that is to come?

Long-term perspective

The rise from the 0.5701 low took the shape of an ascending trend that extended until the high of 0.7064. Along this path, there has been only one major consolidation phase, stretching from the end of April to the middle of May. However, the oscillations that began after the 0.7041 high might be the ones drawing the second extended consolidation.

On Friday, the chart printed an inverted hammer above the ascending trendline but with the body under the intermediary level of 0.6873. This type of candlestick pattern signals the end of a depreciation phase or the possible pausing of it. So, if it is validated, then the bulls just might be able to continue the appreciation — or, at least, the bears would cease sending the price towards the south.

Such validation would look like a close of the current candle above the double support etched by the ascending trendline and the 0.6873 level. Of course, this would be the best option, but if one of the second candles manages to do this, then the bulls still have a shot. A plus would be for the respective candle to close above the high of the inverted hammer.

If the bulls succeed in this endeavor, then they could eye 0.7010 and 0.7191 later on. These targets will still be viable if the price retraces to 0.6722 and confirms it as support, even if, in this case, reaching the targets might require a longer timespan.

Only if the price falls under 0.6722, then the bears could drive the price towards the 0.6637 and 0.6535 intermediary levels.

Short-term perspective

After defining the 0.6776 low, the price rallied until 0.6977. From there, the price oscillated in such a manner that it drew a falling wedge. Because such chart patterns are continuation patterns, and because this one is preceded by an ascending movement, the expectation would be for the bulls to continue sending the price to higher values.

So, if the buyers post the price above the double resistance noted by the 0.6889 level and the descending trendline that starts from 0.6977, then the confirmation of this area as support may very well spark an appreciation that would target 0.6949 and then 0.7002. Noteworthy is that as long as the price sits above 0.6816, the bulls are in charge.

However, if 0.6816 gives way, then 0.6746 is the next bearish target.

Levels to keep an eye on:

D1: 0.6873 0.7010 0.7191 0.6722 0.6637 0.6535
H4: 0.6889 0.6949 0.7002 0.6816 0.6746

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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