AUD/NZD Price Analysis: Bears looking for pullback to entry point

AUD/NZD has been sold off in a supply zone and is now testing the bullish commitments at structural support.
Bears will wish to see how much demand there is this juncture prior to sticking with the sell-off.

Ross J Burland FXStreet

AUD/NZD has proven that the monthly supply zone has held and there are prospects of a continuation to the downside.

However, the price is already testing a critical support structure and the confluence of a 38.2% Fibonacci level. Bears may prefer to wait it out to see if there could be a bullish correction at this juncture.

Scanning the longer-term time frames is beneficial when seeking a swing trade opportunity and when moving down from the monthly tough the daily, we can see that the price is pulling in some meanwhile demand.

The following is a top-down analysis to how we have got to this juncture and offers prospects of a short swing trade from more preferable risk to reward levels on the daily time frame.

Monthly chart

As can be seen, the price is now testing a support structure following a monthly rejection in the supply zone.

Weekly chart

The weekly chart illustrates this a little more clearly with the combination of a 38.2% Fibonacci retracement.

Given how strong the original bullish impulse was, there could be prospects for a deeper correction.

The following daily chart offers such a scenario that that price moves back to test what is now a supposed and new resistance level from which bears will seek entry from a lower time frame, such as the 4 or 6-hour charts:

Daily chart

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD climbs to two-week highs beyond 1.1900

EUR/USD is keeping its foot on the gas at the start of the week, reclaiming the 1.1900 barrier and above on Monday. The US Dollar remains on the back foot, with traders reluctant to step in ahead of Wednesday’s key January jobs report, allowing the pair to extend its upward grind for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold treads water around $5,000

Gold is trading in an inconclusive fashion around the key $5,000 mark on Monday week. Support is coming from fresh signs of further buying from the PBoC, while expectations that the Fed could turn more dovish, alongside concerns over its independence, keep the demand for the precious metal running.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Ripple exposed to volatility amid low retail interest, modest fund inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.