After four years of losses, AUDNZD was able break its losing streak in late April. Since that time the pair has rallied for an impressive 1,200 pips. While the current rally may look a bit extended, recent price action indicates that there may be more fuel left in the tank.
At the moment the pair is testing key resistance in the 1.1300 region. This area is marked by the trend line off the July 2nd high and is also represented by the 2014 high. Needless to say this is an extremely important level that if broken, could provide the technical catalyst needed to see the rally continue.
You will also notice that the current structure, which has been forming since the first of July, has the look of an inverse head and shoulders. Although typically seen as a reversal pattern, the inverse head and shoulders can occasionally act as a continuation pattern.
If the market concurs with this idea, we can identify a potential target using a measured objective. However we should also keep in mind that there are several key technical levels between 1.1300 and the final target.
Summary: Watch for a buying opportunity on a daily close above 1.1300. Key resistance comes in at 1.1428 and 1.1580 with a measured objective at 1.1730.
