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Fan Yang

Stalking AUD/NZD's Rebound; 1.0520 is Key

Yesterday, we looked at AUD/NZD's slide and noted the expected area of support around 1.0480. Today (1/18), price action has breached but returned above the 1.0480 area.

AUD/NZD 4H Chart 1/18

(click to enlarge)

Another Slingshot?
- The 4H chart shows us a picture of a bullish reversal attempt that started at the beginning of the year when price broke above a falling trendline.
- The initial breakout was not convincing because price ended up consolidating right after the breakout. The subsequent breakout from this consolidation was more convincing because it was also a slingshot above the cluster of 200-, 100-, and 50-period simple moving averages (SMAs).
- Now, price is again finding support from the 100- and 200-period SMAs. It looks like another bullish slingshot. Basically, the fact that price was able to rebound off of these SMAs suggests that bull are still in charge of this market. 

1.0520 Resistance:
- Price cracked 1.0480 but is rebounding nicely.
- The 1.05 up to 1.0520 area will be key resistance.
- A break above 1.0520 will be needed to liberate AUD/NZD from the current correction mode. 
- Above 1.0520, we might have a bullish continuation towards 1.06 or even 1.0750. 

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