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AUDNZD revving up for another bullish leg

Since the intraday break below 1.092 and prompt reversal AUDNZD has rallied over 420 pips in four sessions, suggesting the 1.0893 low was the end of an ABC correction. 




AUDNZD May have completed an ABC correction
Since the intraday break below 1.092 and prompt reversal AUDNZD has rallied over 420 pips in four sessions, suggesting the 1.08930 low was the end of an ABC correction. We cannot yet rule out another leg or two lower (to form a Double Zig Zag or Triple 3) but I see potential to for the cross to find support above 1.113 on the intraday timeframes before breaking to new highs. 

Potential support zone between 1.111 - 1.115 on D1
Here we find the Monthly Pivot, 20 day MA and 50 day MA which combined makes a likely support zone to aid with either entry signals or stop placement. Friday also produced an Inverted Hammer to suggest weakness from the bulls, but I am open to a temporary break beneath Friday's low and for a base to be found around 1.111-15. If this support level does indeed hold then we could have an Inverted H&S pattern to consider. 

Intraday price action hints at Bullish Flag or Wedge formations. We also trade within a potential Bullish Wedge but as of yet not had the 'magic 3rd touch' to confirm the lower trendline. Also, not being the biggest fan of trendlines, I am always open to intraday spikes around the trendline, making them suitable areas to consider buy-limit orders with relatively wider stops to ride out any volatility along the way. 






Calendar catalysts between Tuesday to Friday
Monday is a quiet start for AUD and NZD crosses but we do have domestic data for both from Tuesday to Friday to get things moving along. For this reason I am favouring a buy-limit order around the 1.110-15 zone to anticipate an eventual upside move. This leaves potential for a 1:1 reward to risk ratio beneath the sloping resistance level and the option to either book profits or hang on for an anticipated upside break.

An alternative approch is to wait for a break above the sloping resistance and seek bullish setups on lower timeframes, in line woth the bullish breakout. 





 



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