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Forex: Ideas You Can Trade - AUDNZD Losing Support on 1.0350

Posted by Steven Hatzakis on Feb 19, 2015 10:56:00 AM

AUDNZD:  The Lower-Low Today Indicates Loss of Support While Longer Term Trend Line Could Kick-In

The medium term chart below shows the Australian Dollar (AUD) versus the New Zealand Dollar (NZD). This currency pair is known as AUDNZD and is trading near 1.0344 around time of publication.

Last time this pair was reviewed in Ideas You Can Trade was last May when 1.0700 had been breached, and longer-term bearish support lines were pointing lower - yet AUDNZD recovered until it was halted just under 1.1300. Since then it has descended towards current levels and after bouncing off 1.0350 on January 7th - has again returned to test support around this level. 

In two of the last four trading sessions, lows near 1.0325 had been reached, but today the pair pierced just below the 1.0300 line although has since recovered towards current prices. This indicates that support may be failing, and if not maintained here - a bearish continuation may unfold.  

An additional very long term monthly candle chart below shows the steepness of the trend in the last year as well as a potential long term support line (white dotted line on bottom) that coincides around current prices. 

Below are examples of how to trade a bearish continuation or a bullish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.0394  with a Limit to take profit @ 1.0441 and a stop-loss @ 1.0358 Risk/Reward Summary: Limit risk = +47 pips profit / (-36) Stop-loss risk = Gain to Loss ratio =  1.30

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.0298 with a Limit to take profit @ 1.0251  and a stop-loss @ 1.0329 Risk/Reward Summary: Limit risk = +47 pips profit / (-31) Stop-loss risk = Gain to Loss Ratio = 1.51

Medium term daily candle chart:

AUDNZDDaily February 19 2015 note

Long term monthly candle chart:

AUDNZDMonthly feb 19 2015 note


Topics: forex trading, $AUS, AUDNZD, aussie kiwi, technical analysis, New Zealand dollar, aud, Aussie Dollar, aussie trading, NZD


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