Retest alert! I’ve seen this double bottom neckline break on AUD/NZD but thought it better to wait for a pullback instead. Think this would be a good entry?
Long AUD/NZD Idea
You see, I’ve been Kiwi bearish for quite some time, but I’m not sure if my earlier GBP/NZD long idea is still a good option right now. And then I remembered seeing this double bottom confirmation on AUD/NZD, so I checked to see where a good pullback entry might be.
Applying the Fib tool on the latest rally shows that the 38.2% level is in line with the broken neckline around the 1.0650 minor psychological mark. Stochastic is still on the move down to suggest that sellers have the upper hand, but the oscillator is also approaching oversold territory to signal that exhaustion soon.
Although both commodity currencies are sensitive to risk sentiment stemming from U.S.- China trade talks these days, I’m inclined to think that the Aussie might still be on much stronger footing.
For one, economic reports from the Land Down Under have been showing green shoots while data from New Zealand remains mostly downbeat. Aussie bulls were even strong enough to shrug off the RBA cut last week, hinting that market watchers probably think that this might be the last of the central bank’s easing moves.
Looking ahead, it looks like it’s gonna be a light one for the Kiwi while the Aussie has a few medium-tier reports to contend with. Also, word through the forex grapevine is that Trump is open to a “limited deal” with China – something that might benefit its top trading buddy, Australia.
For now, I’m gonna keep my eyes glued to the 1.0600-1.0650 area to spot a possible bounce, then aim for the height of the double bottom (400 pips) as target. Do you think a stop below the 61.8% Fib would be safe enough?
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