- AUD/NZD breakdown underway-decline approaching initial support targets
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AUD/NZD has fallen nearly 3.6% from the January highs with the decline now attempting to break structural support. Price is approaching near-term targets which could offer a reprieve, but from a technical standpoint, the broader risk remains lower. . for now.
AUD/NZD Daily Price Chart
Technical Outlook: We highlighted a break below confluence support at around 1.08 in the Technical Perspective last week with initial targets eyed at “the 61.8% retracement at 1.0722 and the 100% extension at 1.0626.” The decline is now attempting to break below a sliding parallel of the dominant slope (red) with near-term support targets eyed at 1.0663, the 100% ext of the decline at 1.0626 and confluence support at 1.0588.
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AUD/NZD 240min Price Chart
Notes: A closer look at AUD/NZD price action sees the pair breaking below the weekly opening range low / weekly open on this move with initial support targets now in view. The focus remains lower for now while below the slope confluence at ~1.0740 with a breach above 1.0771 needed to shift the near-term outlook back to the long-side (near-term bearish invalidation).
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Bottom line: the immediate focus is lower towards channel support with a drop towards the aforementioned targets to offer entries for a possible near-term recovery. Keep in mind that a break of a proposed head & shoulders neckline earlier this month highlights the broader risk for a measured move into 1.0350/70- a region also defined by the 2017 low-day close and the 1.618% ext off the late-2017 decline. First thing’s first though, from a trading standpoint, look for a reaction on a move towards 1.0626 & 1.0588.
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Relevant AUD/NZD Data Releases
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- Written by Michael Boutros, Currency Strategist with DailyFX
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