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 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.
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.
Previous Post by Author: CAD/JPY – Imminent Bullish Breakout