Hello traders! The AUD/NZD currency pair seems to have entered a consolidation phase as price action doesn’t show any clear direction in the medium term. Although the short term price has been trending upwards and today pair has reached and cleanly rejected a 38.2% Fibonacci retracement level at 1.0800. Not only this is a technical resistance but an extremely strong psychological level.
Along with the Fibonacci resistance, the price has reached the top of the ascending channel and also bounced off it. This shows that bears are strongly defending the 1.0800 level, which might result in a strong pullback.
The key support is seen at 1.0639 area, which is confirmed by two Fibonacci levels. One being the 23.6% retracement and second 127.2% retracement level applied to the current upside swing.
On the other hand, if price will go above 1.0800, AUD/NZD could be heading towards the final resistance at 1.0831 confirmed by 23.6% Fibs. The risk of the uptrend continuation will increase substantially if 1.0831 will be broken, with the daily close above this price. In this scenario, price can easily move up to produce a double top at 1.0880 and even go beyond this level.
Bias: Bearish while below 1.0831
Potential Resistance Zone: 1.0800 – 1.0830
Potential Targets: 1.0640
Have a profitable trading!