AUD/NZD traded higher today, breaking above yesterday’s high of 1.0513, as well as above the downside resistance line drawn from the peak of May 8th. What’s more, the rate is also trading above a new shorter-term upside line, taken from the low of July 2nd. Thus, having these technical signs in mind, we believe that the near-term outlook of this pair has turned somewhat positive.
At the time of writing, the rate looks to be heading towards the 1.0533 level, marked by the peak of June 26th, the break of which may trigger extensions towards the high of June 24th, near 1.0550. However, in order to get confident on larger bullish extensions, we would like to see a decisive break above that zone. Such a move could encourage the buyers to drive the battle all the way up to 1.0588, which is defined by the peaks of June 14th and 17th. Another break, above 1.0588 may allow the advance to continue towards the 1.0608 hurdle, marked by the high of June 4th.
Taking a look at our oscillators, we see that the RSI, already above 50, has turned up and now appears to be heading towards 70. The MACD lies above both its zero and trigger lines, pointing up as well. These indicators detect strong upside speed and corroborate our view for some further advances, at least towards the 1.0550 area.
On the downside, we would like to see a clear dip below 1.0490 before we fully abandon the bullish case. Such a move would bring the rate below the short-term upside line, as well as below the prior downside resistance one, drawn from the high of May 8th. The bears may then get encouraged to push for the 1.0462 zone, the break of which could extend the slide towards the lows of July 1st and 2nd, near 1.0430.
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