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AUD/NZD - Consolidation Levels and Outlook

The AUD/NZD is bullish in November after retreating from 1.13, which was a fresh high on the year. After landing on 1.1090, it has consolidated between that low and 1.1175. 

AUD/NZD 1H Chart 11/11(click to enlarge)

Now, looking at the prevailing price action, the 1H RSI, the moving averages, and the structure of the consolidation, we can see a slightly bearish bias and momentum. Thus we should favor a bearish breakout as price approaches the 1.1090 low. A break below this can open up 85-pips to the downside (length of the current range). This targets somewhere just above the 1.10 handle.

When we look at the daily chart, we can see that around 1.10, we should expect support. Why? The prevailing trend is bullish in 2014, even though it has gotten choppy and more sideways since September. Still, in a neutral-bullish mode, we should expect buyers after a strong dip. 

AUD/NZD Daily Chart 11/11(click to enlarge)

if price instead breaks above 1.1175, it will be in-line with the prevailing trend in the medium-term and open up the 1.13 high with risk of breaking higher. 

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