- A Shooting Star formation indicates the availability of significant sellers at elevated levels.
- An oscillating below the 200-EMA indicates that the long-term trend is bearish.
- The RSI (14) is trading in a bearish range, which indicates that the downside momentum is active.
The AUDNZD pair has witnessed a steep fall after facing barricades around 1.0930 in the Tokyo session. The cross has turned sideways after a vertical fall from Wednesday’s high at 1.0970 and is expected to display more weakness ahead.
In the Tokyo session, the University of Melbourne released the Australian Consumer Inflation Expectations at 6.0% against the projections of 5.7%. It seems that a slowdown in the rate hike pace by the Reserve Bank of Australia (RBA) has resulted in higher short-term inflation expectations. Investors are worried that the RBA would remain behind average global interest rates.
On a daily scale, the asset formed a Shooting Star candlestick pattern on Wednesday, which indicates that the upside is capped and investors are using pullback for initiating shorts. The cross is oscillating in an Inverted Flag chart pattern, which results in sheer downside after a breakdown of the consolidation.
The pair is auctioning below the mighty 200-period Exponential Moving Average (EMA) at 1.0090, which indicates that the major trend is bearish.
Also, the Relative Strength Index (RSI) (14) is oscillating in a bearish range of 20.00-40.00, which indicates that the downside momentum is intact.
Going forward, a downside break of Wednesday’s low at 1.0906 will activate the Shooting Star formation and will drag the asset towards Friday’s low at 1.0877, followed by August 25 low at 1.0825.
On the contrary, the Aussie bulls will regain strength if the cross surpasses Wednesday’s high at 1.0971. This will drive the asset toward the psychological resistance of 1.1000 and August 19 low at 1.1046.
AUDNZD daily chart
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