AUDNZD technical analysis: Is breakout imminent?


Australian Dollar vs. New Zealand Dollar (AUDNZD) is maintaining an excellent fractal strategy which suggest from AUDNZD technical analysis perspectives that an imminent breakout is brewing up .

20 December, AtoZForex – Australian vs New Zealand dollar has maintained a striking similarity to the top made in 2011. Since this now coincides with the bottom of a 20 year range, we continue to maintain a structural long from 1.0350-400 region for at least 1.0745 to 1.15 in extension on a break of 1.0745, only a loss of 1.0200 aborts the medium term bullish outlook.

For the last 30 years AUDNZD has been seen trapped within a 1.05-1.45 range.  Indeed this is the fifth time it has been below 1.06. Albeit it appears to have a tendency to consolidate bottoms below the previous low (1.0232 in this instance) there is clearly scope for a much larger recovery.

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AUDNZD technical analysis from weekly perspective

From weekly AUDNZD technical analysis perspective, the outlook for the pair looks quite constructive as we have seen evidence of exhaustion in the bear run so far which in all should gradually have bulls step up their game going forward into the first quarter of the new year 2017.

Still on the weekly time frame, a larger head and shoulders formation has boldly formed with the low of the left shoulder being 1.0488, 1.0015 being the head and of course the low of the right shoulder also being 1.0232, the right shoulder low is particularly quite pivotal if we must continue to work with our  bullish bias.

Daily AUDNZD technical analysis: Is breakout imminent? Weekly AUDNZD technical analysis (click to zoom in)

Also we have a trend line connecting the low of April to the recent low of September which happens to be a confluence of 78.6% Fibonacci retracement of the whole rally from April low to August 2015 high. More so, at the right shoulder of the larger head and shoulders pattern, a smaller replica of the larger head and shoulders has built up, on a major confluence zone, all adding credence to our bullish outlook for AUDNZD going into first quarter 2017.

Any view of a sustained move outside the range would need to explain a one in 30 year fundamental realignment that currently doesn't seem likely.

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This article was written by Oluranti Owolewa. If you like the article, give credit to the author in the comments section below.

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