AUD/NZD Short-term Set-up Forming After Trigger of Head-and-Shoulders
AUD/NZD Trade Set-up:
- Swing trade in progress, targeting 2015 trend-line
- Descending wedge on 4-hr for shorter-term maneuver
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On Feb 6, AUD/NZD broke the neckline of the head-and-shoulders pattern we were looking at back on Jan 23. It was only a couple of days later there was a thorough retest of the neckline which resulted in a key-reversal bar.
The pattern break itself was enough to turn bearish, the rejection via the key reversal bar even more so. This is a big pattern, so if it is to eventually move to target in the 10450/500 area it could take a while. With that said, traders who don’t have targeted hold times measured in weeks can look to trade along the path of least resistance.
AUD/NZD Daily Chart
With that said, there is a descending wedge developing on the 4-hr time-frame below the neckline which is set to trigger soon. The height of the pattern points to a measured move target of ~10600, which aligns with support from back in July.
AUD/NZD 4-hr Chart
- Multi-week trade in full swing with stop above 2/8 high, targeting 2015 trend-line, ~10450/500
- Shorter-term traders can look to break of the descending wedge, targeting ~10600
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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.