AUD/NZD Bullish in 2014: When we look at the AUD/NZD on the daily chart, we can see a bullish market, although it really represents two multi month consolidations connected by a rally in July that brought the pair to a high on the year at 1.1295, which is still essentially holding despite a brief crack in October.
Ascending Triangle: What we also see on the daily chart is that the market has been consolidating again since September when it hit the high on the year. This consolidation has been in the form of an ascending triangle as the lows have been rising, while the highs have been relatively flat around 1.13.
Triangle Support: Price has been bouncing off the 100-day simple moving average (SMA) during this ascending triangle pattern. As we wind down the 11/13 global session, the AUD/NZD is once again coming down to test the 100-day SMA, as well as a rising speedline from the September low around 1.0920.
Central Pivot, Downside Risk: At this point, as long as price remains below 1.1115, the central pivot of the range since September, there is pressure to the downside. Note that the 50-day SMA is also near 1.1115. Then, if price falls below the current support factors (triangle support, and 100-day SMA), there will be downside risk toward the 1.0920-1.0925 support area, where we can expect buyers again.
Bullish Scenario: However, if price holds above the triangle support and the 100-day SMA, then breaks above the 1.1115 central pivot, AUD/NZD might be in a bullish continuation, at least to test the 1.13 handle.
As price approaches the current support (triangle support and 100-day SMA), we can look at the 1H chart to anticipate a bullish attempt.
Anticipating a bullish sign: Holding above 1.1040 and pushing above 1.1070 could be the first sign that the market is respect the triangle support seen in the daily chat. Thus a break above 1.1070 could be a first sign of bullish continuation or at least to retest the 1.13 high.
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