I had been watching this descending channel on AUD/NZD for quite some time, and it looks like another pullback opportunity is coming right up!
Short AUD/NZD Idea
This pair completed the retracement I was eyeing the other week, once again finding support at the bottom of the channel. This means that another correction might be in the cards, and the Fib tool shows that the 61.8% level lines up with the channel top.
This is also near the 1.0500 major psychological resistance, which might be enough to keep gains in check. If so, price could resume the slide to the swing low around 1.0380.
Stochastic is heading up after recently dipping into the oversold region, indicating that buyers might still have the upper hand for now.
I’m still bearish on the Aussie because the recent RBA minutes suggested scope for yet another rate cut before the year ends. Recall that the central bank already made back-to-back easing moves, so the prospect of one more could drag the currency down.
Also note that the latest jobs report came in weaker than expected, supporting the idea of another rate cut.
Meanwhile, the RBNZ might be able to sit on its hands for its next meeting as the quarterly CPI came in line with expectations of a 0.6% gain, stronger than the earlier 0.1% uptick.
I’m looking to short at 1.0485, with a stop at 1.0525 and a target at the 1.0385 level near the swing low.
What do you guys think?
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.