From around the beginning of November, after hitting the highest point of this year near 1.0865, till around the beginning of December, AUD/NZD drifted south. But recently, the pair entered into consolidation and from around December 5th it keeps moving sideways, roughly between the 1.0400 and 1.0485 levels. While moving sideways, we can notice a possible double bottom pattern, which could lead AUD/NZD to some higher areas. But before considering that idea, the so-called “neckline” of the possible pattern would need to be broken first, which near the 1.0485 level. For now we will remain neutral, but carefully monitor the pair’s activity inside the aforementioned range and wait for a break through one of the sides of it.
If the rate gets a boost and breaks the upper bound of the above-discussed range, this would also break the “neckline” and more buyers might see it as an opportunity to join in and drive the pair higher. AUD/NZD could then get lifted to the 1.0518 hurdle, or even to the 1.0542 barrier, marked by the low of November 25th. The rate may stall around there, as it would also test the 50-day EMA, which slow the bulls down for a bit. That said, if the buying interest is still there, the pair could accelerate higher once again, break the 1.0542 obstacle and target the 1.0588 level, marked by the high of November 26th.
Our oscillators, the RSI and the MACD on the daily chart, are somewhat in support of the above discussed scenario. Although the RSI is still below 50, it started shifting and pointing higher. The MACD, despite being below zero, also started moving in the upwards direction and is running above the trigger line.
On the other hand, if the rate slides below the 1.0388 hurdle, which is the low of December 11th, this could open the door to the current lowest point of December, at 1.0365, a break of which would confirm a lower low and more sellers might join in. We will then target the 1.0290 zone, or even the 1.0263 level, marked by the lowest point of August.
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