The AUDNZD started 2017 on a positive note. The 700 pip rally between January 31st and March 16th was the most aggressive since March of last year.
However, recent losses have wiped out all of this year’s gains. And since early June the Australian dollar cross has been directionless and consolidating within a 200 pip range.
What’s interesting about this is the way it’s formed thus far. Instead of a descending channel, we appear to have a falling wedge. While there’s no doubt the pair is caught in a downtrend at the moment, the recent consolidation pattern could trigger a move higher.
Of course, when that might occur is anyone’s guess. But recent price action does suggest that a bounce higher is in the cards, even if it only provides temporary relief.
But first, buyers need to secure a daily close above the level that extends from the April 20th low. Without that, there’s no reason to consider buying the pair while consolidation persists.
A daily close (5 pm EST) above this trend line near 1.0500 would expose the next key resistance level at 1.0615 followed by 1.0690. Key support at the moment comes in near 1.0350/70.
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