AUD/NZD has been trading in a consolidative manner since Wednesday, staying fractionally below the 1.0625 level, marked by the high of April 16th. Overall, since March 18th, the price structure has been higher highs and higher lows above a tentative uptrend line and thus, we would consider the near-term outlook to be positive.
However, in order to start examining higher areas, we would like to see a decisive close above 1.0625. Such a move would confirm a forthcoming higher high on both the 4-hour and daily charts and may initially pave the way towards the 1.0705 barrier, defined as a resistance by the inside swing low of November 4th. If the bulls are not willing to stop there, then we may see them aiming for the lows of November 11th and 12th, at around 1.0760.
Taking a look at our short-term oscillators, we see that the RSI, although above 50, has been grinding slowly lower after topping near its 70 line, while the MACD, even though within its positive territory, lies below its trigger line, pointing down. Both indicators detect slowing upside speed and suggest that a setback may be in the works before the next positive leg, perhaps for the rate to test the aforementioned uptrend line for a third time.
Having said that, in order to start examining the case of a trend reversal, we would like to see a strong break below 1.0475. This may confirm the completion of a double top pattern and could firstly challenge the 1.0415 zone, marked by the low of April 13th. Another dip, below 1.0415, could set the stage for extensions towards the 1.0350 area, which if it doesn’t hold either, then we may see declines towards the low of April 8th, at around 1.0285.
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