AUD/NZD: The Pair has Rebounded from the Level of 1.1260. What’s Next?
Since the end of March the pair AUD/NZD has been declining. The pair again failed to break strong resistance level 1.1260 (ЕМА200 Fibonacci 38.2% to the last wave of decline since November 2011). The pair has been repeatedly approaching the level of 1.1260 in the summer of 2014 and 2015 and after that it rapidly fell.
The same situation can repeat. The Australian dollar is overbought at the currency market. Therefore, we can expect sharp decline if the price of the AUD. At the moment the price of AUD/NZD is at the support level of 1.1085, which is crossed by ЕМА144 on the weekly chart, by the lower line of the ascending channel on the daily chart and by ЕМА144 and ЕМА200 on 4-hour chart.
Breakout of this level will cause trigger the decline in price to the levels of 1.0900 (ЕМА144, ЕМА200 on the daily chart), 1.0800 (Fibonacci 23.6%), 1.0535 (lows of 2013, 2014 and 2016), 1.0445 and further down to 1.0000.
On the 4-hour, daily and weekly charts the indicators OsMA and Stochastic give sell signals.
As an alternative scenario the price can consolidate above the level of 1.1260 and go up to the level of 1.1635 (Fibonacci 50%).
Further movement will depend on macro-economic statistics of New Zealand and Australia and the decisions of the central banks of these countries.
Support levels: 1.1085, 1.0800, 1.0535 and 1.0445.
Resistance levels: 1.1260 and 1.1635.
Sell Stop: 1.1060. Stop-Loss: 1.1090. Take-Profit: 1.1000, 1.0900 and 1.0800.
Buy Stop: 1.1110. Stop-Loss: 1.1080. Take-Profit: 1.1260, 1.1300, 1.1400 and 1.1500.
The material has been provided by LiteForex - Finance Services Company - www.liteforex.com