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The AUDNZD continues to climb following the March 27th rally.
I wrote about the pair this past Monday. At the time, AUDNZD was still trading below a confluence of resistance at 1.0450.
However, the way the pair had been hovering just below the area was suggestive of an imminent breakout.
Last week’s bullish engulfing range also provided us with some clues.
The latest RBA rate decision and statement turned out to be a non-event for markets.
But that’s a good thing in the case of AUDNZD, at least if you intend to trade it.
A negative response to the RBA would have sent the pair tumbling below 1.0450 while a positive reaction would have left traders chasing long positions.
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As it is, though, AUDNZD is settling in above 1.0450 nicely.
Notice how this area is the intersection of former trend line resistance from the August 2018 high and a horizontal pivot that began last December.
So far, buyers are keeping AUDNZD above this area on a daily closing basis.
And that’s the key. As long as the pair remains above 1.0450, that 1.0670 resistance area is exposed.
I use New York close Forex charts so that each 24-hour session closes at 5 pm EST.
These charts are required for trading price action on the higher time frames.
You’ll recall from Monday’s post that 1.0670 is former wedge support that extends from the 2015 low.
One thing I like about AUDNZD is that it gets me away from the indecision on AUDUSD and NZDUSD.
Unlike the two majors, AUDNZD has been trending nicely since last August.
We’ll see if this latest breakout can re-expose a level that is 200 pips above the current price.
Keep in mind too that the 1.0545 horizontal level could become a factor on the way up.
One last thing…
Although AUDNZD can put in some nice trends, the pair does tend to consolidate quite a bit after sudden moves.
Given that the pair just rallied 200 pips in seven days, we could see some consolidation above 1.0450 before buyers are ready to make their next move.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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