AUD/NZD is clearly trending upwards. A current correction down was stopped by 200 EMA, which might provide yet another and perhaps final short term buying opportunity.
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:
Key support levels: 1.700
Key resistance levels: 1.0850
Price Action: On the 4-hour chart price continue to trade upwards while producing higher highs and higher lows. AUD/NZD remains above the uptrend trendline, although the price hasn’t tested it until this point. It is possible that AUD/NZD will try to reach the trendline after which price will start moving up.
On the 1-hour chart, AUD/NZD has reached and rejected the 200 Exponential Moving Average while hitting 1.0714 low. It is important for the hourly closing prices to remain above this level, otherwise, the 200 EMA will be compromised. However, as long as AUD/NZD will respect the EMA, the price should be expected to continue moving towards the 1.0850 area. This is a strong resistance zone confirmed by two Fibonacci retracement levels applied to the last 2 corrective moves down.
Make sure that there is no hourly close below the 1.0714. Also, check that the hourly candle closes above the minor resistance at 1.0735 in order to confirm a new higher high. This could be the trigger for the buying opportunity with a potential stop loss below 1.0700 psychological support. In order to achieve a Risk vs Reward ratio of 1:2, stop loss could be placed at 1.0675. The potential target or take profit level could be placed near 1.0851