AUDNZD is attempting to bottom after months of consolidating.
Since December, the Australian dollar has struggled to gain ground against its New Zealand counterpart.
But it hasn’t lost ground either, at least not since early January.
The price action in January even carved what could be a double bottom.
You can also see how the highs since December 12th have formed a descending trend line.
That level came under fire late last week, but sellers managed to keep the price below it into the weekend.
As I always say, repeated retests of a key level suggest an imminent break.
Notice how AUDNZD has pressured this area since February 5th.
That constant pressure may lead to a confirmed break by the end of today’s session at 5 pm EST.
For me, it’s going to take a daily close above resistance near 1.0440.
If AUDNZD buyers can close the pair above that 1.0440 area, we could see the Australian dollar cross move higher over the coming days.
As for key resistance on the way up, keep an eye on the 1.0520 region.
A close above that would expose the October 2019 lows at 1.0660.
Alternatively, a daily close back below the short-term trend line near 1.0440 would negate or at least delay the bullish reversal.
I use New York close charts so the “daily close” refers to 5 pm EST. These charts are essential for trading price action the way I do.
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Keep in mind, however, that we have an RBNZ rate decision and statement on Tuesday at 8 pm EST.
As such, I’m inclined to give the AUDNZD some space for now.
If we see a confirmed break today and retest of 1.0440 as new support following Tuesday’s RBNZ, I may entertain an entry.
As always, though, I’m in no hurry.
The last thing I want to do is put capital on the line ahead of a high-impact event as we have on Tuesday.