Trend traders huddle up!
AUD/NZD’s February upswing looks like it’s running out of steam around the 1.0600 major psychological handle.
What makes the current consolidation interesting is that it lines up with a 50% Fib retracement and is just under a previous support as well as the trend line and 100 SMA resistance areas.The cherry on top is a potential bearish divergence on the 1-hour chart.
Will AUD/NZD extend its downtrend this week?
I’m not seeing a bearish momentum yet, so the Aussie can still gain some more pips and even hit higher Fib levels closer to the trend line before the bears show up.
AUD/NZD bears can start shorting as soon as the pair dips below the 38.2% Fib and aim for the previous lows near 1.0540.
But if AUD/NZD sustains its upswing and ends up breaking above the trend line and 100 SMA resistance levels, then you can start placing them long orders to target previous inflection points like 1.0670 or 1.0700.
If you feel like trading longer time frames, then you’re gonna love that EUR/USD is heading towards the 1.1950 zone that marks the 50% Fib on the daily.As you can see, the area is also around the 100 SMA, trend line support, and a resistance area from August to September 2020.
Will the euro’s losses stop when EUR/USD hits the 100 SMA or the trend line?
Meanwhile, euro bulls can wait until the bearish move loses momentum and get ready to enter the longer-term uptrend around the Fib levels.