The ascending trend line is holding up pretty well for AUD/NZD and it looks like another test of support is coming up.
Is the trend still our friend?
AUD/NZD 4-hour Forex Chart by TradingView
AUD/NZD has been forming higher lows connected by a rising trend line that’s been holding since mid-August, as monetary policy divergences between the RBA and RBNZ have been highlighted.
While the Australian economy continues to print upbeat data and its central bank kept rates on hold as expected, New Zealand has been seeing some misses that are keeping easing expectations in play.
Can AUD/NZD sustain its uptrend from here?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Australian dollar and the New Zealand dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The pair is already in correction mode after hitting a ceiling at R2 (1.1420) and is closing in on the 38.2% Fib that lines up with the pivot point (1.1310). A larger pullback could dip to the 50% Fib closer to the trend line support or the 61.8% level near S1 (1.1270).
Keep your eyes peeled for reversal candlesticks at any of these areas since a bounce could take AUD/NZD back up to the swing high or higher.
On the other hand, a clean break below the trend line support and 100 SMA dynamic inflection point could suggest that a reversal from the uptrend may be in order, possibly dragging the pair down to the next support at S2 (1.1200) then S3 (1.1160).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
