AUD/NZD Approaches Key Slope of Influence- Longs at Risk Sub-1.0786
- AUD/NZD eyes multi-year inflection slope- Interim support at yearly open
- Updatedtargets & invalidation levels
- Looking for trade ideas? Check out DailyFX’s 2016 4Q Projections
Chart Created Using TradingView
Broader Technical Outlook: We’ve been tracking the ‘slope of influence’ in AUD/NZD originating off the 2014 low. Last month the pair made a false-break below parallel support, with the subsequent rally now approaching slope resistance. Note that this trendline converges on the 50% retracement of the 2016 range at 1.0785 into the close of the month and represents a key inflection point.
The pair has been trading within the confines of a well-defined ascending pitchfork formation off the yearly lows with the median-line highlighting near-term support at the 2016 open at 1.0655/63. A break below this level risks a more significant correction towards the January low at 1.0539 with our broader bullish invalidation level set lower at 1.0435/39. A breach eyes the highlighted trendline confluence at ~1.0885 backed closely by the 61.8% retracement at 1.0915.
Notes: Heading into the start of the week the immediate focus is on the 1.0663-1.0771/86 range with the long-bias at risk while below key slope resistance discussed above. Look for a break of this range to offer guidance on our near-term directional bias. From trading standpoint, I would be looking to fade weakness into structural support near the January lows at 1.0539 with a breach higher eyeing subsequent topside objectives into the upper parallels.
A quarter of the daily average true range yields profit targets of 19-23 pips per scalp. Added caution is warranted heading into key data prints this week with New Zealand 3Q CPI & RBA minutes on tap tonight. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount.
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Relevant Data Releases
Other Setups in Play:
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- SPX Sell-Off Rebounds off Slope Support
- EUR/USD Breakdown Eyeing Initial Support Targets
- USD/JPY Exhaustion Shifts Focus to Uptrend Support
---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.