Technical Bias: Bullish
Key Takeaways
• Australian dollar continues to find buyers on dips against the New Zealand dollar.
• Current market sentiment points for gains in the AUDNZD pair moving ahead.
• AUDNZD support seen at 1.0760 and resistance ahead at 1.0840.
Australian dollar failed to break the yearly pivot against the US dollar, which pressured the AUDNZD pair as well taking it back to an important support area which held the downside in the pair.
Technical Analysis
There is a critical expanding triangle forming on the daily timeframe for the AUDNZD pair. Every time the pair traded lower it has managed to find buyers around the triangle support trend line. The pair after creating a short-term top around the 1.1034 level traded lower towards the triangle support area. Currently, the pair is flirting around the 100-day simple moving average and 23.6% Fibonacci retracement level of the recent drop from the 1.1034 high to 1.0733 low. If the pair succeeds in trading higher from the current levels, then it might challenge an important confluence resistance zone of 50-day SMA, 200-day SMA and 38.2% fib level around the 1.0840-60 area. If sellers fail to defend the mentioned resistance zone, then the pair might trade close to the 50% fib level at 1.0885.
Alternatively, if the pair moves lower, then buyers might appear around the triangle support area. Only a break and close below the triangle would call for a test of the previous low of 1.0520.
Importance of RSI Trend Line
There is a crucial RSI trend line forming on the daily timeframe, which is now coinciding with the 50 level. So, if the pair trades higher and RSI also breaches the trend line confluence zone, then it might be considered as a bullish sign in the short term. In that situation, the pair might bounce sharply towards the 1.0880 level, followed by the 1.0910 level.
