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AUDNZD Extends Gains: 1.0500 Is Now Support

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Since my last commentary on the AUDNZD on January 4th, the pair has rallied 130 pips. The setup materialized on a break of trend line resistance that extends from the October 26th high.

More specifically, we were looking for the 1.0420/30 area to hold as support following the break. The low since that time is 1.0423.

Then over the weekend I commented on how the 1.0500 and 1.0600 areas could act as minor resistance on the way up. You may have noticed that Tuesday’s session breached the 1.0500 handle by a considerable margin.

With this break in mind, traders can begin to watch for buying opportunities on pullbacks to the 1.0500 support area. And while I do think 1.0600 could attract a few sellers, my final target is 1.0765.

A daily close above this area would represent a much larger (bullish) development.

In November of last year, we discussed the potential of a six-month inverse head and shoulders pattern. And considering the recent swing low at 1.0353 never came close to taking out the head at 1.0236, that structure is still intact.

However, there’s still a lot of ground to cover before we begin to consider the implications of a 530 pip reversal pattern. For now, it’s all about the levels you see in the chart below.

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AUDNZD daily chart

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4 comments
Mimi says

Hi Justin, what are your thoughts on “seasonal trades”. For example, JPY tends to become strong during January each year due to financial/tax year end with Yen flowing back into Japan. However, I have been following many of your trades and your GBPJPY trade has been going down a lot (as per your posts) well before any of this ‘seasonal’ comments started. Thank you so much for replying to my comments I post.

Reply
    Justin Bennett says

    Mimi, I don’t pay much attention to it. I’ve found that as long as I focus on the chart, I’ll come out on top over time. Anything else can easily become a distraction.

    But as always, it depends on what YOU need to be successful.

    Reply
Miguel Angel Zozaya says

Are you out, off, the NZD/CAD already? I ask ‘cos you haven’t mentioned it in a while and it has been going the “other” way.
Regards, MAZ

Reply
    Justin Bennett says

    I’ve been out of that for quite some time.

    Reply
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