The AUD/NZD currency pair has established a downtrend after there was a confirmed break below the uptrend trendline, which occurred on September 1st.
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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AUD/NZD symbol on the MT4 platform
Key support levels: 1.0814, 1.0786, 1.0755
Key resistance levels: 1.0900
Since the start of September, the price has reached the low at 1.0814 and corrected up towards 1.0900. This is a very strong psychological as well as the technical resistance level which is being rejected.
The 1.0900 resistance is confirmed by 38.2% Fibonacci retracement level applied to the overall move down. This level also corresponds to the previous demand zone and considering the very clean rejection today, it could have become the supply area.
While it might be an ideal selling price, spikes above the 1.0900 resistance level can be expected. However, as long as the daily close remains below, the downtrend will remain valid. In regards to the potential downtrend support levels, there are two of them.
Price could be heading south to test either 78.6% Fibs at 1.0786, or 88.6% Fibs at 1.0755. The second support is also confirmed by the 427.2% Fibs applied to the small pullback after the uptrend trendline breakout, where the trendline was acting as the resistance and price rejected it cleanly. Not to mention that 1.0755 support also goes in line with the previous resistance area, which could be providing support for the AUD/NZD in the coming days or weeks.
In regards to the uptrend potential, the price might produce spikes above the 1.0900 resistance on the daily timeframe. But only a daily break and close above the spike will completely invalidate the bearish forecast.