Last Wednesday we outlined the potential for AUD/NZD to mean revert towards 1.0370 resistance. Having hit that key level today in Asia, we take another look at this pivotal level.
The daily chart remains in a downtrend with a series of lower lows and highs. Furthermore, its retracement has failed to re-test the 20-day eMA, underscoring weakness to it ‘rebound’. Granted, its not the most aggressive of trends, yet the structure remains clear.
If New York is to close around current levels, a potential hammer could materialise which could suggest a swing high was in place. Failing that, prices could go on to form a bearish flag. It’s usually best to allow a little breathing room around support and resistance levels, so we’ve pencilled in a resistance zone around 1.0370/90 (near the 20-day eMA).
Whilst we remain beneath the resistance zone, the bias remains for move a towards 1.0238 support. Whereas a clear break back above this area would put it on the backburner as risks point towards a deeper correction.
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