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- AUDNZD is trading at descending support levels of it falling wedge formation which is a bullish chart pattern
- MACD has been in bearish territory, but has not exceeded its previous lows which is a bullish sign
- RSI is trading in and out of extreme oversold territory and a breakout should fuel the rally
- Profit taking in order to realize profits will initiate a short covering rally
- New institutional long positions by swing traders off of good entry levels
- Positive economic data out of Australia
