AUD/NZD produced a bearish engulfing candle on the daily chart yesterday. The combination of the last three candles has created a pattern called evening star. Thus, the pair may head towards the South this time. Major intraday charts have been playing with some interesting equations, though. Let us have a look at those three charts.
Chart 1 AUD/NZD Daily Chart
The chart shows that after being bullish, it produced a bearish pin bar at the level of 1.04865. The next candle came out as a bearish engulfing candle. This one is a strong bearish reversal pattern. Thus, the sellers may be keen to look for short opportunities. The price bounced off at the level of 1.03220 twice. Thus, it may find its next support around that level. The H4 chart traders must be very interested in the pair to go short after such price action. Let us have a look at the H4-AUD/NZD Chart.
Chart 2 AUD/NZD H4 Chart
The chart shows that the price has been on strong consolidation between the levels of 1.04310 and 1.04085. The level of support looks strong. However, the evening star on the daily chart may help the pair make a bearish breakout. If the price makes a bearish breakout, it may find its next support at the level of 1.03665. The H4 chart holds another equation. It may end up producing a head and shoulder. Let us have a look at the chart below.
Chart 3 AUD/NZD H4 Chart
The chart shows if the price makes a bearish breakout, it may head towards the South to develop the last wave of the head and shoulder. The head and shoulder pattern suggests that the price may find its next support around the level of may hold their short entry up to the level of 1.03265.
Chart 4 AUD/NZD H1 Chart
The price gets caught within an ascending channel. The price is heading towards the level of support again. The H1 buyers will be eying to go long on this chart upon getting a strong bullish reversal candle. On the other hand, the sellers are to wait for the price to be around the level of resistance and give them a chance to go short. Considering the H1 chart, the buyers have the upper hand.
The H1 chart looks good for the buyers, but the daily and the H4 chart look very good for the sellers. Thus, the pair may end up having another bearish day. If it really does and the daily candle closes below yesterday’s candle, the next H4 bearish wave may relatively be a stronger one.
Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.