Hello traders! AUD/NZD has established a medium-term downtrend after price broke below the downtrend trendline as well as the 50 Exponential Moving Average. This was also the break below a strong support zone, formed near the 38.2% Fibonacci retracement which corresponds to the psychological support at 1.0900.
After there was an 8-hour candle close below the trendline, the price pulled back up and cleanly rejected the trendline along with a 50% Fibonacci retracement level at the 1.0929. Then the price went down sharply reaching 1.0815 low, followed by a corrective wave up.
Currently, the upside correction was stopped by the 38.2% Fibs along with the 50 EMA. This should once again provide selling pressure, but only as long as daily close remains below the key psychological resistance at 1.0900, which actually was today’s high.
AUD/NZD is expected to continue the downtrend and can aim for one of the support levels based on Fibs. The nearest support is at 1.0788, corresponding to a 78.6% Fibonacci retracement level. However, if there will be a break below this level, AUD/NZD should continue the decline to test the next Fibs at the 88.6% Retracement level. This is 1.0755 level which also corresponds to the 427.2% Fibs applied to the pullback up where the trendline was rejected previously. To summarise, as long as the daily closing price remains below 1.0900, AUD/NZD is expected to decline by 100-130 pips from the current price.
Bias: Strongly bearish while below 1.0900
Potential Resistance Zone: 1.0880-1.0900
Potential Targets: 1.0790, 1.0755
Have a profitable trading!