Can you believe we’re trading the second half of February already?!
Let me know if you’re looking at these setups, too!
If you’re looking at AUD/NZD as closely as I am, then you’ll know that, aside from a consolidation around the holidays, the 100 SMA has been a solid support and resistance area for AUD/NZD since mid-October.
This is why it’s a BFD that AUD/NZD is now trading below the 100 SMA on the 1-hour time frame.Are we looking at the start of a reversal? Shorting at current prices is a good bet if you’re convinced that the Aussie is starting a downtrend against the Kiwi.
Don’t underestimate the 200 SMA support, though! While the moving average isn’t as effective at maintaining trends as the 100 SMA, its position near the 1.0700 psychological handle can attract enough bulls to prevent a longer-term downtrend.
If you’d really rather buy AUD/NZD, however, then you’ll want to at least wait for some momentum back above the 100 SMA before you aim for previous highs like 1.0775 or 1.0840.
Now that GBP/NZD is also trading above the 100 SMA, are pound bulls ready for a more sustained upswing?Before you buy the pound like it’s the last feta cheese in the supermarket, you should know that a bearish divergence has popped up on the daily chart and that the 200 SMA is still hovering above GBP/NZD’s current prices.
If the pound sustains its upside momentum and actually breaks above the 200 SMA, then you can start plotting a possible return to the 1.9600 or even the 2.0000 previous areas of interest.
But if market bears take advantage of the divergence and the 100 SMA resistance, then y’all better be ready to trade the trend and aim for the previous lows closer to 1.8650.