AUDNZD: Short-Term Bullish Recovery May be Over as Long-Term Resistance Tested
The medium term chart below shows the Australian Dollar (AUD) versus the New Zealand Dollar (NZD). This currency pair is known by the symbol AUDNZD and trading near 1.0763, and down slightly today near session lows.
Last time AUDNZD was covered in this series a bearish continuation looked imminent, however, the short term bullish recovery that since followed [from earlier in March] appears to be loosing momentum after resistance was encountered over the last four trading sessions. The last two sessions appear to be congruent with the slope of the long term bullish support line (point 2 in dark red - which is now acting as resistance) - where the short term move may reverse upon.
This long term line has been the main guide of price action in recent months, as mentioned in the previous post, with prices regressing back to it, and although 1.0488 could still be a target to the downside, if this long term line is breached, and the pair continues higher, then the lines of a less-bearish medium term channel intersecting just above, near 1.10, could be next, (point 1 in magenta color on chart) and long term bullish support near 1.11 (point 8 in dark green), thereafter.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.0835 with a Limit to take profit @ 1.0880 and a stop-loss @ 1.0790 Risk/Reward Summary: Limit risk = +45 pips profit / (-45) Stop-loss risk = Gain to Loss ratio = 1.00
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.0741 with a Limit to take profit @ 1.0701 and a stop-loss @ 1.0779 Risk/Reward Summary: Limit risk = +40 pips profit / (-38) Stop-loss risk = Gain to Loss Ratio = 1.05
Medium term daily candle chart: