AUD/NZD Consolidates Below 1.0700; Can the Bulls Overcome that Barrier?
AUD/NZD surged yesterday, breaking above the resistance (now turned into support) barrier of 1.0670. That said, following the break, the rate has been trading in a consolidative manner between that level and the key resistance zone of 1.0700. Following the upside exit from a falling wedge formation on the 13th of April, the price structure has been of higher peaks and higher troughs and thus, we see a positive near-term outlook for now.
If the bulls prove strong enough to drive the battle above 1.0700, we may see them aiming for our next resistance of 1.0720. Another break above that hurdle could set the stage for more bullish extensions, perhaps towards the 1.0760 zone, defined by the peak of the 22nd of March.
Turning attention to our short-term oscillators, we see that the RSI, already above 50, has turned up again. The MACD however, although positive, stands near its trigger line and points sideways. What’s more, both the indicators lie below their respective short-term downside resistance lines, which mark the negative divergence between them and the price action. Having these momentum signs in mind, we remain careful that a corrective setback may come into play before the next positive leg, perhaps for another test near 1.0670.
On the downside, we would like to see a decisive dip below 1.0655 before we start examining whether the bears have gained the upper hand. Such a dip could initially see scope for downside extensions towards our next key support territory of 1.0620.
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Article written by Charalambos Pissouros, Senior Market Analyst at JFD Brokers
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JFD Team
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