Almost Time To Buy AUD/NZD?
- Cycles point to a potential reversal in trend
- Key support zone eyed around 1.0600
Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.
AUD/NZD has been under steady pressure for well over a month now and just on Thursday the cross touched its lowest level since late March. It would seem that the AUD/NZD downtrend is well on its way. However, our analysis of the cycles paints a different picture. The next few days are an important turn window for the cross and the chances for a reversal or at least an attempt at one during this time look to be much greater than normal. This particular cyclical interval is especially interesting as it marks 3,141 calendar days (Pi) from the major low in 2005. The key price zone for us over the next few days is between 1.0620 and 1.0585. In this support area we have the 4th square root relationship of the year’s high, the 1st square root relationship of the years’s low and the 78.6% retracement of the year-to-date range. Ideally we would like to see this support zone tested and successfully hold over the next few days to signal that a change in trend is upon us. Sustained weakness below 1.0585 would clearly undermine the potentially positive cyclical picture.
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AUD/NZD Daily Chart: July 11, 2014
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risk in the Week Ahead:
LEVELS TO WATCH
Resistance: 1.0695 (Fibonacci), 1.0720 (Gann)
Support: 1.0615 (Gann), 1.0585 (Gann)
Strategy: Buy AUD/NZD
Entry: Buy AUD/NZD at 1.0615
Stop: 1-day close below 1.0585
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail email@example.com. Follow me on Twitter at@KKerrFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.