AUD/NZD Price Analysis: Short-term and swing-trading short trade prospects

• AUD/NZD is gearing up for a shorting opportunity from both a short term and longer-term outlook.
• Price action is neutral on the daily but overstretched on weekly and monthly time frames.
• In the near term, the 15-min correction of the hourly bearish impulse is compelling if below the 21 moving average. 

As can be seen from a top-down analysis, the market is overextended to the upside from both a technical and positioning analysis perspective.

Firstly, as price dips the tow into the monthly supply area, the kiwi has been a notable laggard year to date.

The most noteworthy move in the week ending 18th August was NZD positioning, that jumped by 10% of open interest. The Aussie was barely changed. 

This could give rise to a follow-through in the spot market where the Aussie has already had a good run so far. 

First of all, the hourly time frame shows that the bulls have had three attempts to break out to the upside. They are walking a fine trend line support at this juncture.

A test of the support and a subsequent break to the downside could be in order:

Hourly chart

Monthly and weekly charts

The price is in the weekly chart, above, looks overextended and a retracement to the 38.2% Fibonacci could be in order.

In the monthly chart, below, a restest of the W-formation's neckline to the downside could be in order if the bears keep up the pace.

Daily chart

Meanwhile, however, the daily support structure is the spanner in the works for a seeing trading set-up. 

Bears will need to be patient and prudently wait for an opportunity to short the pair if or when the support structure breaks. Until it does, the outlook stays neutral. 

Possible day trade shorting opportunity 

For the immediate future, the price is tiring to the upside as depicted in the 15-min chart above as it corrects less than a 78.6% Fib of the latest bearish 1-hour Impulse.

The price has moved in such a fashion that a break of the 15-min 21-moving average creates a shorting opportunity below the supporting trendline structure. 

A momentum indicator such as MACD below zero or RSI below 50 would aid the bearish prospects. 

On the other hand, if the price remains in a bullish trajectory and moves beyond a 78.6% Fib, such a scenario would invalidate the set-up.

Target achieved, 4.25 R

There were two cracks at the whip as first entry was a breakeven before the next opportunity arose to short again in bearish conditions to the same target.