AUD/NZD traded lower yesterday but found support at the 1.0475 level and rebounded to hit resistance near the 1.0520 zone. The pair continues to print lower peaks and lower troughs below the downtrend line drawn from the peak of the 10th of October and thus, we believe that the near-term outlook remains negative.
If the bears are willing to take charge again soon, then we may see them aiming for another test near the 1.0475 zone, the break of which could open the way for the 1.1410 territory, marked by the low of the 9th of July 2017. Another dip below 1.1410 could set the stage for the 1.0375 area, which provided solid support from the 22nd until the 27th of June last year.
Taking a look at our short-term oscillators though, we would stay cautious of another rebound before the next negative leg, perhaps for another test near 1.0520, or near the 1.0545 area. The RSI exited its below-30 zone and stays slightly above 30, pointing somewhat up. The MACD, although negative, has bottomed and crossed above its trigger line.
Now, in case we see the rate emerging even above 1.0545, then we could experience extensions towards 1.0590, the break of which could pave the way for the 1.0625 zone. That said, even if this is the case, the rate would still be trading below the aforementioned downtrend line and therefore, we would class such a recovery as a corrective phase. We would like to see a clear break above 1.0700 before we start examining the scenario of a trend reversal.
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