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AUD/NZD Price Sequence Leading It Towards a Breakdown

AUD/NZD Price Sequence Leading It Towards a Breakdown

Paul Robinson, Strategist

AUD/NZD could soon accelerate lower

AUD/NZD continues to work its way lower since peaking back in October, and the price sequence is helping lend towards carving out a broad head-and-shoulders pattern. One could also view the price action since last fall as a descending wedge.

In either case, the outcome could soon become decidedly bearish if support breaks. The neckline of the pattern comes across as a trend-line from September, but just below it is a solid area of support dating back to July (the 200-day MA also runs in the vicinity). A solid daily close below 10824 should get AUD/NZD rolling downhill.

The measured-move target, based on the height of the formation, points to a move to around 10400. There is a trend-line extending higher from April 2015 which arrives ahead of this target, so this will be viewed as the more important level of support.

An update will be provided on this set-up and others in the Wednesday and Friday technical webinars, as things progress.

Struggling with confidence? You’re not alone. These 4 ideas may help get you back on track – Building Confidence in Trading.

Chart - AUD/NZD: Daily

AUD/NZD daily price chart

Tactical Approach:

  • Bearish bias kicks in on a close below 10824
  • Targeting 2015 trend-line, ~10450/500
  • Close back above 10900 doesn’t negate trend, but warrants caution on shorts

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---Written by Paul Robinson, Market Analyst

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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