Currency Pair: AUD/NZD (update) Chart: 15 Min Charts Short-Term Bias: Short
UPDATE
Over the last few hours, the AUD/NZD has broken above the channel as well as the 120 SMA line. However, current price action continues to face resistance at 1.2240 (21.4% Fib level), and may break to the downside as the RSI nears the overbought level. We continue to hold a bearish outlook for the AUD/NZD, and expect the pair to test for support at 1.2128 (psychological level) over the coming trading session. If the pair gains enough momentum to break below 1.2128, we expect the aussie-kiwi pair test 1.1959 for support. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.
OUTLOOK
The AUD/NZD has come under selling pressure after peaking to 1.28 in July, and has broken the uptrend initiated at the beginning of 2008. In the past 24 hours, price action fell below the short-term support at 1.2241 (21.4 Fib level), which may turnout to be the new resistance level for the pair. We expect the AUD/NZD to hold within the channel, and anticipate price action to fall back towards the lower channel in the next few trading sessions as the downward trend in the RSI provides confirmation to our outlook. Price action has also crossed over the 120 SMA line over the last 24 hours, which brings us to the conclusion that the downward momentum may lead the pair to test for support at 1.2128 (psychological level). Over the next few months, we expect the AUD/NZD to hold course, and may break well below 1.20 in the coming months.