AUD/NZD Bearish Chart Pattern Developing Nicely
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AUD/NZD has been choppy as of late, nothing unusual for this cross, but that could soon change. Since July, a solid-looking head-and-shoulders formation has been in the works and is running out of time before triggering.
In addition to the neckline there is a lot of support below. Several bottoms since July down to 10841, with the 200-day in approximate alignment. This makes the mid-10800s substantial. A daily close below 10841 will likely have AUD/NZD rolling downhill with momentum.
On a breakdown the first objective targeted clocks in around the 10670s, followed up by a trend-line running higher from April 2015, which runs under lows each of the past three years. Stops should be placed well out of harm's way above the neckline, 10905 is sufficient. This will leave for ample room from a risk/reward perspective for the medium-term swing-trader as well as plenty of distance to significant support for traders with short-term hold times.
These 4 tenets can be used to help bolster your Confidence as a Trader.
AUD/NZD Daily Chart (Head-and-shoulders)
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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.