The AUD/NZD continues to consolidate this week in a range between roughly 1.07 and 1.0850. Let’s take a look at the charts.
The 1H AUD/NZD chart shows a perfectly sideways range. As we speak price is essentially in the middle of this range and the moving averages have all coiled into the center as well. The longer this consolidation goes, the more explosive the breakout might be.
Today, we had a test of the range support, where we saw strong buying. There appears to be a slight bullish bias in that respect. A break above 1.08 should put pressure on the 1.0850 resistance.
The 4H chart also suggests we should anticipate the bullish breakout simply because the prevailing trend since the end of April is bullish. Price is above the 200-, 100-, and 50-period SMAs and the RSI has held above 40. These are signs of a strong bullish market, making the 1.0850-1.0890 area vulnerable.
Looking at the weekly chart, we have some ideas of where this rally could be heading to. First we should look for some short-term resistance around 1.10, which is in the middle of a previous support/resistance pivot area. But there is more upside towards the 1.1304 high. We should watch out for strong selling around 1.13 especially if the rally is challenged by a falling trendline that goes back to the 2011 high at 1.3794.
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