Despite recent weakness, AUDNZD looks ready to hold the range that has been in place since July. However we do need to see some confirmation in the form of bullish price action before an entry can be justified.
There are actually two levels in play at the current range floor. The first is the horizontal level at 1.0890 (shown in the chart above), with the second being trend line support off of the July 29th low (shown in the chart below).
Yesterday’s retest of 1.0890 was a successful one for the bulls, however the October 2nd break of trend line support gave reason for concern that this range bottom may not hold for long.
Fast forward to today and the bulls have not only managed to hold on to the range bottom at 1.0890, they have pushed the pair back above former trend line support on a 4 hour closing basis.
While we don’t yet have a price action setup per se, the strength over the last 24 hours is certainly indicative of a market that intends to maintain its current range. This leaves us watching for a buy signal on a retest of the broken level as new support.
Note that the New Zealand GDT price index is tentatively scheduled for later today, so be sure to keep this in mind when considering an entry.
Summary: Watch for bullish price action on a retest of the trend line from the July 29th low as new support. Key resistance comes in at 1.1100 and 1.1300. Alternatively, a 4 hour close back below the trend line would negate the trade idea and put further pressure on the range floor at 1.0890.
