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Fan Yang

AUD/NZD to Confirm Bullish Breakout

AUD/NZD is likely developing a bullish reversal in 2017. Looking at the daily chart, we can see that 2016 since May was a year of consolidation (roughly between 1.0250 and 1.0750). Then, in the early part of 2017, price started to break above this consolidation pattern.

AUD/NZD Daily Chart

(click to enlarge)

Breakout Confirmation.
- First of all note that the bullish breakout broke above a neckline around 1.0750, then a couple of falling trendlines.
- After this sharp bullish breakout tagged 1.10, we can see that price started to retreat.
- Note that price came down to test the broken consolidation range as a price bottom. So far, it looks like the market is respecting this price bottom.
- Also we can see that the RSI held above 40 for the most part after retreating from above 70. This shows maintenance of the bullish momentum.
- The bullish outlook is still within a larger period of consolidation, not just the range in 2016. 
- The first bullish target would be the 1.10 mark, which showed resistance in March.
- The weekly chart below shows a larger range between roughly 1.0010 and 1.1420. We should probably start anticipating resistance around 1.13 if price does indeed push above 1.10.

AUD/NZD Weekly Chart

(click to enlarge)

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