The AUD/NZD has been consolidating throughout 2014. Before this year, the pair has been in a downtrend since 2011’s high of 1.3794. With that in mind, let’s look at the daily chart as the market forms a price bottom.
As we get towards the latter part of the 5/29 global trading session, aud-nzd has rallied above the previous 2014 high set in February at 1.0946. As price approaches 1.10, it will be testing the 200-day simple moving average.
A break above 1.10 will be a strong bullish signal. Then if a pullback can hold north of 1.08, the bullish outlook should still be in play. This breakout scenario first opens up 1.1190-1.1200, which was a previous consolidation support area.
Let’s see how the market reacts around 1.12. Further bullish confirmation, such as a bounce off the 200-day SMA, will help put the 1.16 area, which represents a previous consolidation resistance, in sight.
The bullish AUD/NZD reflects a divergence in the reaction between AUD/USD and NZD/USD. While the AUD/USD rallied off its 0.92 support area maintaining a bullish outlook, NZD/USD broke below the 0.85 support area, shifting towards the bearish one.
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Earlier: AUD/USD Breaks Above Consolidation; 0.9310 is Key Resistance