AUD/NZD Falls Below Key Support of 1.0660
JFD Team | Nov 14, 2018 07:18AM ET
AUD/NZD tumbled today, falling below the key support (now turned into resistance) barrier of 1.0660, which prevented the rate from sliding lower on the 1st and 9th of May, as well as on the 19th of June. Since the 6th of November, the price structure has been of lower peaks and lower troughs below all three of our moving averages, and also below a very short-term downtrend line taken from the peak of that day. Thus, we would consider the near-term outlook to be negative.
Currently, the rate is trading near the 1.0620 barrier, which was proven a good support from the 19th until the 24th of April. If the bears maintain their momentum and manage to push the battle below that level, then we may see them aiming for the 1.0575 area, the break of which could open the way for the 1.0550 obstacle, which supported the price from the 13th until the 17th of April.
Shifting attention to our short-term momentum studies, we see that the RSI turned down and dipped within its below-30 zone, while the MACD lies below both its zero and trigger lines, pointing down. These indicators detect strong downside speed and support the notion for AUD/NZD to continue drifting south for a while more.
On the upside, we would like to see a clear move back above the key territory of 1.0660 before we start considering the case for a decent recovery. Such a break is likely to see scope for extensions towards 1.0700, a resistance defined by yesterday’s high, as well as by the inside swing low of last Wednesday. If that level fails to stop the rate from rising further, then we may see a test near Monday’s peak, at around 1.0740. That said, the pair would still be trading below the downside resistance line drawn from the high of the 10th of October and thus, we would class such a recovery as a corrective phase.
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