It is possible that the consolidation phase will take place and the price will be moving near 1.0800 resistance during the coming week. The most important thing is to watch for the daily closing prices, which must remain below the 1.0800 throughout the range-trading phase.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
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Trade Idea Details:
AUD/NZD symbol on the MT4 platform
Key support levels: 1.0754
Key resistance levels: 1.0800
On the daily chart, AUD/NZD formed a long-term double top near 1.0865. At the same time key support is seen at 38.2% Fibonacci retracement level at 1.0636, which is also a point of break of the 200 Exponential Moving Averages that occurred on the 19.11.2019. This support level corresponds to the supply/demand zone formed between 30.05.2019 – 06.09.2019 and goes inline with the extended 200 EMA. All-in-all, 1.0636 could be the level of interest once again, making it a perfect downside target.
On the 4-hour chart, today pair has reached and rejected 38.2% Fibonacci retracement level which is extremely close to the key psychological resistance at 1.0800. The RSI oscillator formed a bearish divergence and these facts are suggesting an incoming corrective wave down, to test previously mentioned support at 1.0636.
On this chart, the key support level corresponds to 23.6% Fibs applied to the overall downtrend, and to 127.2% Fibs applied to the current/last wave to the upside. Therefore, as long as daily close remains below 1.0800, AUD/NZD exchange rate is expected to drop by 130 pips.
Potential Trade Idea:
Selling opportunity is presented as long as the price remains within 1.0770 – 1.0800 area. The downside target, which is confirmed by multiple Fibonacci levels is at 1.0636. In order to meet the 1:2 risk/reward ratio, stop loss should be placed not lower than 1.0837.