AUD/USD Hovering at 0.7914

The Australian versus the United States dollar currency pair seems to be determined to win the 0.7914 handle. Are the bears prepared?

Long-term perspective
After completing the corrective phase that spans between the 0.7413 high and the 0.6991 low, the bulls thrust until the 0.7320 resistance area from where — following an unsuccessful bearish attempt to regain control — they continued their march towards the north at a slower but constant pace.
Once reaching the 0.7744 level, the bears started to show their willingness to stop the bulls in their tracks. Yet again, the bears only managed to print another corrective phase, one that this time stretches between 0.7820 and 0.7563.
Just as before, upon reaching the first resistance area — in this case, 0.7744 — the bears took their chances to send the price towards the south, striving to oppose the bullish movement. Still, as before, the bulls swiftly put the bears to respect, printing a rise that set the price a hair away to the next firm resistance area — 0.7914.
From this point onward, the first possible scenario is for the appreciation to simply continue until it reaches gets above 0.7914. Another scenario is for a short-lived consolidation phase — such as a pennant or flag — to unfold just under 0.7914, leading to its piercing. A throwback is also possible, one that would seek to validate the previous peak — 0.7820 — as support before proceeding to pass 0.7914.
However, if from 0.7914, the price retraces back to the 0.7744 support, then the bears might attempt to send the price under it, targeting 0.7587. On the flip side, if 0.7914 becomes support, the bulls can eye 0.8108. Of course, along this path, the 0.8000 psychological level — not highlighted on the chart — is a profit booking area for the bulls.

Short-term perspective
From the 0.7503 low, the price appreciated until reaching the 0.7802 resistance area. After consolidating above 0.7742, the price finally challenged 0.7802, which resulted in its piercing.
As long as the price oscillates at the 0.7883 level, the bulls may attempt to conquer it, which, if they do, opens the path to the 0.7995 intermediary level.
However, if 0.7883 proves to be a solid resistance, then 0.7802 may be paid a visit.

Levels to keep an eye on:

D1: 0.7914 0.7744 0.7587 0.8108 and the peak of 0.7820
H4: 0.7883 0.7995 0.7802

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Original from: www.earnforex.com