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Bulls Missed Their Chance on AUD/NZD from 1.0700?

June 17, 2020 at 6:05 by Dorin Rosu

The Australian dollar versus the New Zealand dollar currency pair had trouble getting back above the 1.0707. Does this point to bearish times?

Long-term perspective

The rise that started from the 0.9991 low, after the solid 1.0013 support level was confirmed, decelerated towards the end op April, drawing a less steep ascending trend that printed its last high at 1.0880.

From the high, which limited further advancement beyond the important 1.0826 resistance level, the price extended the decline towards the potential double support crafted by the major 1.0707 level and the ascending trendline.

However, the bulls failed to find support in this area, as the price shifted under it and stopped a hair away from the 1.0631 intermediary level. From there, the bulls tried to render the movement as a false piercing, but couldn’t, as the price etched even lower, noting the low of 1.0582.

Even if the candle on 15 June was a strong bullish one, 16 June invalidated the previous day’s gains as it confirmed the aforementioned potential support as a double resistance.

So, the false break of 1.0826, coupled with the confirmation of the double resistance, brings about a bearish profile. In such circumstances, if the bulls don’t pull off an ace out of their sleeves, then the bears might very well drive the price to 1.0631.

If 1.0631 falls under the bearish pressure, then 1.0292 is their next target, with 1.0474 and 1.0393 serving as intermediary targets. However, if the bulls do manage to regain 1.0707, then they have another chance to conquer 1.0826.

Short-term perspective

The depreciation that started from the peak of 1.0728 extended until the 1.0650 low, taking the price under the intermediary level of 1.0681 in the process.

One possible scenario is for the price to impress a short-term consolidation pattern that will then spell a new decline. Also, a decline can commence after the price confirms 1.0681 as resistance. If such developments do unfold, 1.0621 is a first target, followed by 1.0573.

On the other hand, if the bulls have enough fuel for another push beyond 1.0681, then, if this level gets confirmed as support, they could continue until 1.0741 and even to 1.0778.

Levels to keep an eye on:

D1: 1.0707 1.0631 1.0474 1.0393 1.0292 1.0826
H4: 1.0681 1.0621 1.0573 1.0741 1.0778

If you have any questions, comments, or opinions regarding the Technical Analysis, feel free to post them using the commentary form below.

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