AUD/NZD Weekly Support is Rejected Yet Again

AUD/NZD Weekly Support is Rejected Yet Again

Published: March 2nd, 2020

Weekly chart

AUD/NZD Weekly Technical Analysis 2 Mar 2020

On the Weekly chart, we can see very strong support at 1.0270 which is close to 1.0300 psychological area. Since July 2016 this prie has been playing a key role, but on multiple occasions, pair failed to break and close below this level.

Since no new lower lows were printed, AUD/NZD seems to have entered a consolidation phase. In this scenario, the price should start correcting north and can potentially reach the 200 Exponential Moving Average.

The Moving Average resistance area corresponds to the 23.6% Fibonacci retracement level, applied to the 05.08.19 - 16-06.19 corrective wave up, which resulted in 200 EMA breakout. After the MA breakout, the price corrected down heavily and resulted in a 5.13% drop, from 1.0865 high, down to 1.0315 low. And as we can see, the 1.0300 support area has been respected once again.

4-Hour chart

AUD/NZD 4-Hour Technical Analysis 2 Mar 2020

On the 4H chart above, we can see a rejection of the 200 EMA back on January 15. This is where the resistance level was formed at 1.0460. AUD/NZD then returned back down to the 1.0300 support area, bounce and broke previously formed resistance at 1.0460. These are some good indications of a potential uptrend on the lower timeframe.

The 1.0460 resistance is broken and 1.0300 support rejected. At this point, buyers could be accumulating while price can remain volatile. Current range trading between 1.0385 and 1.0477 can continue for a short period of time. Although at some point AUD/NZD should be expected to produce a new higher high. Keep in mind that key support is located at 1.0384, and if broken, it will invalidate bullish outlook and should result in another selloff on AUD/NZD.

1-Hour chart

AUD/NZD 1-Hour Technical Analysis 2 Mar 2020

On 1H chart price broke above the descending channel, which is yet another confirmation of buyers’ domination. While short term trend remains bullish, AUD/NZD can still correct down, to test the 200 EMA, which might act at the support. This is the area of 1.0430.

Summary

In the long term, AUD/NZD has entered a consolidation phase. This, at the lower timeframe, can result in the continuation of an uptrend, especially after multiple resistances where broken.

Upside targets

There is one very strong resistance. As can be seen on the 4H chart, It is located at 1.0703. It corresponds with the 23.6% Fibonacci retracement level but what is, more importantly, this level has been the key price of interest between September and November 2019.

Probability of a downtrend

While the price remains above the 1.0387, bulls will dominate on AUD/NZD. However, break below this price level, will immediately invalidate bullish forecast, and should be considered as a trend reversal on a lower timeframe. In this scenario, price is likely to drop down to the 1.0300 key psychological support area.

Support: 1.0387, 1.0315

Resistance: 1.0460, 1.0700

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