AUDNZD Forex Forecast – Possible Correction

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AUDNZD Forex Forecast - Possible Correction
AUDNZD Forex Forecast - Possible CorrectionAUDNZD broke past the resistance around the 1.1000 major psychological level last month then zoomed up to the 1.1300 levels before showing signs of a pullback. Applying the Fib tool on the latest swing high and low on the daily time frame shows that the 38.2% to 50% levels line up with the broken resistance, which might now hold as support.
Stochastic is already indicating overbought conditions, which suggests that sellers are already exhausted and might be ready to let buyers take over. If so, price could bounce off these Fib levels and make its way back to the previous highs or much higher.
However, the 100 SMA is below the 200 SMA so the path of least resistance is to the downside. This suggests that price might break below the Fibs and go for the swing low at 1.0600.
The RBA decided to keep interest rates unchanged at 2.00% in yesterday’s policy statement. Officials gave a mostly upbeat assessment of the economy and reiterated their positive outlook but included a paragraph warning about the potential negative effect of AUD strength.
Meanwhile, the GDT auction in New Zealand showed a 2.1% bounce in milk prices, erasing part of the previous 2.9% slump. Data from New Zealand has been mostly weaker than expected, as ANZ commodity prices posted a sharp decline while business confidence has tanked.
There are no other event risks for both Australia and New Zealand for the rest of the week, although the upcoming FOMC minutes release could spur additional volatility.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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