The AUD/NZD has been bearish throughout the year coming close to parity in April. Since last week, it has been consolidating in a narrow range. Let’s take a look at the charts to prepare for a breakout.
The 4H chart reflects a bearish trend based on the dynamics of the moving averages and price action along with the fact that the RSI has been tagging 30 and holding under 60 for the most part since mid-March.
AUD/NZD is now consolidating between roughly 1.0131 and 1.0219. Price is stuck between the 100- and 50-period SMA. Now, the preferred scenario is a break below the range because it would be in-line with the prevailing bearish mode. Pressure will then return towards the 1.0020 low on the year and historic low, with risk of breaking lower to tag the psychological level of 1.00.
If price breaks above 1.0220, we can expect to see some bullish correction, but we should limit that bullish outlook to the 1.03, at most the 1.0325 support/resistance pivot area.
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