Consolidation is the name of the game for AUD/NZD, as the pair appears to be forming a symmetrical triangle pattern on its 1-hour chart. Price is still moving lower, along with stochastic, indicating that a test of the triangle support near the 1.0950 minor psychological level might take place. A bounce from this area could lead to a rally back to the top of the triangle near the 1.1000 mark, but don’t discard the possibility of a downside break just yet! Make sure you review our lesson on How to Trade Breakouts if you’re bearish on this one.
Aha! Check out this bearish divergence playing out on EUR/NZD’s 4-hour forex chart! Resistance at the falling trend line and broken support zone appears to be holdin’ like a boss, as price is showing a bit of downside momentum. A selloff could take the pair back to its previous lows around the 1.5400 levels or at least until that nearby area of interest at 1.5600. Heck, a stronger drop might even lead to the formation of new lows! Better set those stops right if you’re planning to take a short trade on this pair.
Time for the Kiwi to recover? Just like the EUR/USD daily chart I showed y’all yesterday, NZD/USD is stalling at a long-term resistance turned support zone. At the same time, stochastic is starting to move out of the oversold zone, reflecting a return in buying pressure. If Kiwi bulls are strong enough, they could push the pair up to the next area of interest at the .8550 broken support area. On the other hand, if Kiwi bears come back to play, they could trigger a strong breakout below the .8400 major psychological support.
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.