AUD/NZD Price Sequence Leading It Towards a Breakdown
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.
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Chart - AUD/NZD: Daily
- 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.