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AUDNZD Nears Key Inflection Point at 1.0890

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

Click here to get access to the same charts I use.

Like some other crosses such as EURGBP, the AUDNZD can be sporadic at times. Even moves on the daily time frame tend to partially backfill more often than not.

However, like any market, the AUDNZD can offer some incredibly profitable setups if you’re patient enough and know what to look for.

One such setup may be in the works. A view of the weekly time frame shows a wedge pattern that’s been developing for the last few years.

AUDNZD weekly wedge pattern

It’s one of the better wedge patterns I’ve seen lately. And the fact that it spans several years and has a height of 1,600 pips is a huge bonus.

As you may well know, that distance of 1,600 pips becomes the measured objective once the pair breaks support or resistance on a daily closing basis. I’d say we’re at least a few months from needing to worry about that though.

Remember that when I write “daily closing basis”, I’m referring to the New York close at 5 pm EST. Not all brokers offer this type of chart. You can go here to get free access to the same charts I use.

We know from the weekly chart above that the AUDNZD recently tagged wedge resistance at 1.1160. If the market continues to follow the pattern of swing highs and lows since mid-2017, the next move calls for a decline toward the 1.0600 area.

Now to identify an entry point. For that, we turn to the daily time frame where we have an ascending channel that’s been in place since June of this year.

It seems to me that a daily close below channel support near 1.0890 may trigger a third retest of weekly wedge support in the 1.0600 region.

There are a few things you should keep in mind though…

  1. Nothing says the AUDNZD must break channel support. For all we know, the 1.0890 area will trigger a bounce back to wedge resistance near 1.1130.
  2. A 300 pip move to 1.0600 wedge support would likely take weeks, if not months to play out.
  3. There will be bounces along the way. Horizontal areas such as 1.0850 and 1.0660 will likely attract buyers if tested.

For now, this is just one to keep on your watch list. If sellers can clear channel support, we could see another decline toward the 1.0600 region. Alternatively, a bounce from channel support would encounter sellers at wedge resistance near 1.1130.

Don’t forget that when the multi-year wedge breaks down, it could trigger a 1,000+ pip move. That’s all the more reason to keep an eye on this one.

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AUDNZD daily ascending channel

Leave a Comment:

6 comments
Mohsin Farooq Iqbal says

nice setup!

dear Justin,

i would like to request u to write an article on inside bar setup or some webinar on it

thanks

Reply
Al says

I anticipate a break down of the 1.0890 area due to an intra-pattern pattern (rising channel) break and retest of 1.0950 area. This puts me short with a target of 1.0600 A break and retest of 1.0850 would encourage me to add to the position.

Reply
KELECHI says

Thanks for your analysis.
You have used the phrase “key inflection point” before in other currency pair lately, can you explain more clearly what that phrase means? Its importance? and how do we identify such in future pair?

Thanks a lot.

Reply
    KELECHI says

    Hi
    Mr Justine, please you have not yet responded to my earlier question.

    Cheers.

    Reply
    Justin Bennett says

    An inflection point is an area or event that results in a significant turning point.

    When in doubt, Google it. 🙂

    Reply
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