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Australian Dollar Forecast Bearish as AUD/NZD Eyes August Lows

Australian Dollar Forecast Bearish as AUD/NZD Eyes August Lows

2019-11-22 03:00:00
Dimitri Zabelin, Junior Currency Analyst
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Australian Dollar, New Zealand Dollar, AUD/NZD – TALKING POINTS

  • AUD/NZD downside breakout below support with confirmation inviting rapid selloff?
  • Pair’s descent comes after it suffered its biggest one-day decline since February 2017
  • AUD/NZD now eyeing August lows at 1.0542. Bearish bias for the long-term outlook

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The Australian Dollar continues to fall against its New Zealand counterpart as AUD/NZD confirms a downside breakout below 1.0607 that has been met with confirmation. The second consecutive daily close below the floor could precede a selloff in AUD/NZD until the pair hits support not reached since August at 1.0542.

AUD/NZD – Daily Chart

Chart showing AUD/NZD

AUD/NZD chart created using TradingView

AUD/NZD’s rapid decline appeared to have been catalyzed by two factors. The first was the pair’s failure to break above the August 2015 descending resistance channel which will be shown in the paragraph below. The second was AUD/NZD’s biggest one-day decline since February 2015 that saw the pair close over 1.30 percent lower and below support at 1.0665. From there, selling pressure ensued and dragged the pair further down.

Zooming out to a weekly chart shows that the pair’s massive decline earlier this month catalyzed a downside break below August 2019 uptrend. However, the pair’s descent could encounter some friction around 1.0542. A break below this level could mark a tectonic shift in the pair’s trajectory, or rather reinforce the notion that the longer-term outlook for AUD/NZD is considerably more bearish.

AUD/NZD – Weekly Chart

Chart showing AUD/NZD

AUD/NZD chart created using TradingView

AUSTRALIAN DOLLAR TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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