AUD/NZD Pullback Testing Pivotal Support
- AUDNZD breakout pulls-back into initial support pivot at 1.1010/20
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
Broader Technical Outlook
We’ve been tracking this trade for some time now on SB Trade Desk with the breach & re-test of former slope resistance at 1.0724 earlier in the month shifting the focus to the topside on AUDNZD. The advance has now taken out a key confluence region at 1.1010/20 where the 100DMA, the 61.8% retracement and a long-term trendline extending off the January 2014 low converge.
Immediate support is eyed here with our general outlook remaining constructive while above 1.0910/20. A breach higher targets resistance objectives at 1.1113/15, 1.1213 & trendline resistance dating back to March 2011 high ~1.13.
Notes: AUDNZD has been trading within the confines of a well-defined ascending median-line formation with the pullback now testing confluence support at 1.1010/20 (note the weekly open at 1.1019). A break below this mark risks a decline back towards support objectives at 1.0966 & the 50% retracement at 1.0920 with a break sub 1.0861 needed to shift the focus back to the downside.
Interim resistance stands at 1.1080 backed by targets at 1.1113 and the upper median-line parallel / 1.1164. A quarter of the daily average true range (ATR) yields profit targets o 24-26 pips per scalp. Added caution is warranted heading into New Zealand Trade Balance data later tonight & the RBA Interest Rate decision early next week, with the releases likely to fuel volatility in Kiwi & Aussie crosses, respectively. As we approach thin holiday illiquid conditions, it's worth reviewing principles that help protect your capital. We call these principles the "Traits of Successful Traders."
For updates on this scalp and more setups throughout the week subscribe to SB Trade Desk
Relevant Data Releases Next Week
Other Setups in Play:
- GBP/JPY Plummets Into Support- Sell Rips Sub 186
- Webinar: Dollar Crosses at Key Juncture Ahead of US Holiday
- EUR/CAD Rebound Eyes 1.4340 Hurdle
- NZD/USD Drops Into September High- Bearish Sub 6588
- Webinar: USDOLLAR Primed for Uptrend Continuation
---Written by Michael Boutros, Currency Strategist with DailyFX
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