The AUDNZD has continued its contraction and maintained its falling wedge formation as visible in this D1 chart. This currency pair is now trading at its descending support level of its bullish chart pattern and we expect it to stabilize and attempt a rally which would first take it back to a strong support level which turned resistance. A breakout from here should take this currency pair back to its descending 50 DMA.
MACD has confirmed the last leg of the sell-off, but starts to bottom out and did not drop below the previous lows which points to future bullishness for this currency pair. The histogram has gaped away from its moving average and we expect this gap to be closed and bearish pressures fading away. RSI is trading in and out of extreme oversold territory and a breakout should fuel the rally.
We recommend a long position at 1.1425 with a take profit level of 1.1775. This would be an addition to our two previous long positions which we took on July 1st and July 12th at 1.1825 and 1.1625 respectively. We also recommend a stop sell order at 1.1375 with a take profit level of 1.1300.
Traders who wish to exit this trade at a loss are advised to place their stop loss level at 1.1325. We will not use a stop loss order and will execute this order as recommended. Place your take profit level at 1.1775 for all long positions.
Here are the reasons why we call the AUDNZD currency pair higher
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