AUD/USD Completes a Price Bottom and NZD/USD Confirms Its Own

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AUD/USD Completes a Price Bottom and NZD/USD Confirms Its Own

The USD has been giving back its gains recently, and the AUD/USD is starting this week completing a price bottom. Meanwhile NZD/USD has already completed a price bottom and has spent the past couple of weeks testing it as support. Let’s take a look at these two currencies in their daily charts.

AUD/USD Daily Chart 4/28
audusddailychart428
(click to enlarge)

AUD/USD fell from a 2014-high at 0.9505 to a low in 2015 at 0.7533. During most of this downtrend, price held below all three of the 200-, 100-, and 50-day simple moving averages (SMAs), and the daily RSI held below 60. All that has changed by the 4/28 session.

We can see price pop up above the 100- and 50-day SMAs and the RSI above 60. Most importantly ,we can see a period of sideways action that has built a price bottom. Now price has broken above this price bottom and above a falling trendline from 2014.

Further confirmation for a price bottom would be if a subsequent pullback fails to break below the 0.7750 area.The current bullish outlook should still be limited because of the prevailing downtrend, but we will probably see an attempt to tag the 0.8295-0.83 resistance area.

NZD/USD Daily Chart 4/28
nzdusddailychart04282015
(click to enlarge)

The NZDUSD is also building a price bottom but is looks more advanced than the AUD/USD. The daily chart shows the market already complete a double bottom by the end of March. Price has broken above the 100-, and 50-day SMAs, and the RSI is just clearing the 60 mark, which reflects loss of bearish momentum.

Throughout much of April, price drifted sideways but respected the 0.74 area as support, and thus maintained the double bottom. Now it looks poised to push to 0.78, above which, the 0.80-0.8033 highs from October 2014 reside.

A turnaround this week to break below 0.74 would invalidate the bullish correction outlook.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.