In this piece, we will look for the strongest currency in the Antipodes. So, let the battle between AUD and NZD begin. I will tell you from the very beginning that in my opinion, Australia should win this, at least in the middle term, and to back this up, I have the following arguments:
First of all, and this is actually the most important reason, we are bouncing from the blue line. That doesn’t sound so serious, right? Oh but it is, the blue line is the lower line of the triangle, which has been connecting higher lows since March 2015! We’re bouncing from this line, which is creating a smaller triangle, or an inverse head and shoulders pattern if you will. Both formations will be active when the rate breaks the upper pink line. That will be the ultimate trigger here. As long as we stay inside, you can hope, but there won’t be a signal.
Well, long story short, the pair closing the day above the pink line will tell you to buy. On the other hand, a closing price below the blue line will signal the opposite.