The AUD/NZD has been sharply bullish since finding support around 1.0020 in April. After a double bottom, we can see the aggressive rally in the daily chart, which just cracked the previous high on the year. So in just a month, the pair has erased 4 months of decline.
Price has also broken above the 200-day SMA and the RSI has pushed above 70, all signs of a new bullish market. However, even though the pair made a new high on the year, it has not clearly liberated it self from that 1.0795 resistance. We can see price stalling now just under 1.09. It looks like if price retreats back below 1.07 ,we might see a bearish correction to the month long rally. Let’s zoom into intra-session price action to stalk the current consolidation.
When we check out the 1H chart, we can see that there is still bullish bias even in the near-term. now, price is consolidating under 1.09 and mostly under 1.0850. It looks like a possible flag pattern. But even within this consolidation, price is still holding above the 100-hour SMA and the 1H RSI is above 40. The false break down that tagged 1.07 could be a sign that bulls are still in charge. If AUD/NZD reclaims ground above 1.08, it will likely continue the current bullish trend and put pressure on the 1.09 area. A break above 1.08 would also liberate AUD/NZD from the previous high on the year.
Now, let’s say there is another bearish swing instead of a break above 1.08. The overall trend in the short to medium-term would still remain bullish if price can hold above 1.0650, a previous resistance pivot. However, a break below 1.0650 might shelve the bullish outlook and keep AUD/NZD in a sideways market, with some downside risk in the short-term.
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