AUD/NZD Bearish Break Offers Wide Open Space to Fib Levels

The AUD/NZD has been in range for more than 5 year on the monthly chart (price action hitting the 21 ema zone). Price is now showing a potential bearish breakout with 100-300 pips space.

But the Fibonacci levels could also act as support zones… Let’s review the monthly and 4 hour charts.

Price Charts and Technical Analysis

AUD/NZD Monthly chart 30.11.20

The AUD/NZD seems to be building a large ABC (blue) pattern. Although this wave outlook is fragile to the choppy consolidation zone.

If a larger wave C (blue) does occur, then price is expected to make a bullish bounce at the Fibonacci retracement levels. Price should also break above the resistance trend line (orange) if a 5 wave pattern emerges (pink).

A break below the bottom invalidates (red circle) the bullish outlook. This confirms a bearish breakout below the range and also a full downtrend.

On the 4 hour chart, price could have completed a wave 5 (purple) of a larger ABC (pink) pattern at the -27.2% Fibonacci target (green box) and 50% Fib on the monthly chart.

  • But price action must break above the 21 ema zone and then the 38.2% resistance Fib to confirm that (blue arrows).
  • A bearish breakout below the support zone (green line) or a bearish bounce at the 38.2% Fibonacci zone could confirm the bearish outlook.

It remains likely that price action will move lower to test at least the 61.8% Fib at 1.04 if not the 78.6% Fibonacci retracement level at 1.0220 on the monthly chart. Also, the -61.8% Fibonacci targets form a confluence at 1.0310.

AUD/NZD 4 hour chart 30.11.20

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.

American Indices With a Very Powerful Bullish Setup

Nasdaq and SP500 made huge inverse head and shoulders patterns and are advancing significantly higher

FTSE trying to break the upper line of the wedge

EURUSD climbed back above the 1.177 support

AUDUSD climbed back above 50 and 61,8% Fibonacci

GBPUSD broke the neckline of the iH&S formation

AUDNZD is testing major horizontal support

Gold broke major long-term dynamic resistance

For a look at all of today’s economic events, check out our economic calendar.

 

Stocks Erase Tuesday Loses, On The Way Towards New Highs Again.

Stocks erased Tuesday’s loses and are heading significantly higher.

EURUSD fell back below crucial support and are now testing the lower line of the flag.

EURAUD still locked inside of the long-term range.

AUDNZD breaks the neckline of the inverse head and shoulders pattern and the upper line of the flag.

USDJPY creates a small pennant after breaking major long-term dynamic resistance.

EURNZD with the head and shoulders pattern but the first attack on the neckline was unsuccessful.

NZDCAD with a head and shoulders pattern but the first attack on the neckline was unsuccessful too.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Breaks Crucial Resistances, but GBP/USD and AUD/USD Fail

CAC tests the broken neckline as the closest support

FTSE bounces from the bottom line of the wedge pattern

SP500 breaks the neckline of a big inverse head and shoulders pattern

EURUSD breaks major dynamic and horizontal resistance

AUDUSD bounces with style from the crucial horizontal resistance

GBPUSD is doing pretty much the same

EURAUD aims the upper line of the range

AUDNZD fails to go higher after a beautiful bullish setup

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD and Major Indices Test Important Resistance

CAC after the false bearish breakout is forming the inverse head and shoulders pattern.

Nasdaq, as expected, reached the 11550 resistance.

SP500 is testing the neckline of the iH&S pattern.

EURUSD is flirting with the upper line of the flag and horizontal resistance on 1.175.

EURPLN tests the 4,5 again.

EURAUD still locked inside of the sideways trend.

AUDNZD with a very similar situation to EURUSD, the price is below the lower line of the flag.

AUDUSD tests crucial horizontal resistance, first rection is a small bounce.

For a look at all of today’s economic events, check out our economic calendar.

Buyers Try to Stop This Bearish Madness

 

DAX broke the lower line of the wedge

CAC broke the lower line of the triangle

NASDAQ creates inverse head and shoulders pattern

SP500 bounces from the 38,2% Fibonacci

Dollar Index creates double top formation just above crucial resistance

EURUSD and GBPUSD try to initiate a bullish reversal with the double bottom formations

EURPLN finally escapes from the triangle to the upside

AUDNZD tests the broken support as a resistance

AUDJPY with the false bullish breakout and the head and shoulders pattern

For a look at all of today’s economic events, check out our economic calendar.

Markets Tries to Recover After FED’s Disappointment

Indices drop sharply but try to catch first horizontal supports in order to recover

Nasdaq looks very promising on its 23,6% Fibonacci.

Brent goes up after the bullish escape from the small triangle.

USDJPY with a proper sell signal coming from the triangle.

EURUSD with a head and shoulders pattern, defending the neckline as we speak.

EURJPY creates a head and shoulders pattern on the major, long-term down trendline. That look extremely bearish.

AUDNZD defending crucial horizontal support.

For a look at all of today’s economic events, check out our economic calendar.

Stock Traders Lick the Wounds Ahead of the NFP Data

DAX drops like a rock but stops on the major up trendline, where the price tries to initiate a reversal

CAC creates a false breakout pattern from the symmetric triangle

Nasdaq and SP500 tumble but are still above all major supports

Brent in the negative territory after escaping from the wedge pattern

Gold tries to defend major long-term up trendline

Dollar Index tries to create a triple bottom formation

USDCAD below major resistance, waiting for crucial job data

AUDCHF and AUDNZD test important horizontal support

EURPLN finally escapes from the sideways trend and breaks major long-term down trendline

Indices and USD Climb Higher

DAX aims higher after the breakout of the upper line of the flag

CAC is getting closer to the upper line of the triangle

SP500 avoids the drop after the bearish head and shoulders pattern

Gold drops and aims long-term up trendline

EUR/USD is about to test a combination of crucial supports

AUD/NZD makes contact with important horizontal level

CAD/CHF breaks the upper line of the ascending triangle pattern and aims higher

AUD/JPY with a very similar situation

Dollar Goes Down Again, Indices Quite the Opposite

Dollar Index breaks crucial horizontal support

Brent escapes from the symmetric triangle

USD/CAD goes lower after the successful breakout of the 1.33

GBP/USD will test 1.32 again

DAX bounces from 12800 again

EUR/USD breaks important horizontal resistance

USD/JPY is back below 106

AUD/NZD is on the 8th bullish day in a row

Gold cancels the wedge and comes back to the bullish trend

For a look at all of today’s economic events, check out our economic calendar.

Video Technical Analysis: NZD Starts This Week With a Drop

Monday starts with a slight optimism on the major exchanges but it’s hard to call it a game-changer as the volatility is rather low and we can sense a holiday mood on the trading floors. Worry not, in this environment we were still able to find three interesting trading setups, which you may find very interesting.

First one is a small update about the AUDNZD, which we mentioned a few times at the beginning of the month. Back then, the price was testing crucial resistance on 1.085. Price was trying to close a day above that level since September 2019. In ourprevious analysis, we said that price closing a day above that resistance will be a legitimate buy signal. And it did! Since that time, we got 8 bullish days in a row and price is currently 180 pips higher, what a move! With this, the long-term sentiment is definitely positive but a chance for a short-term bearish correction is rising.

As for the NZD, we do have a very negative situation on the NZDJPY, where we broke the lower line of the rectangle, which gave us a proper sell signal. Now, we are testing the neckline as we do have a proper head and shoulders formation. Priceclosing a day below the neckline will be a super strong sell signal, especially when we will consider a weekly chart and the shooting start candlestick bouncing from the long-term downtrend line.

Last but not least is the EURPLN, which is on the verge of breaking crucial horizontalsupport – 4,4. In the shorter-term, the price created a rectangle pattern and Mondaystarts with an attack on its lower line. First attack seems unsuccessful and it actually opens a way up north based on the possibility of a false breakout pattern. One is certain here. We are getting closer and closer to a final decision, sharp breakout and a slide or a bounce.

For a look at all of today’s economic events, check out our economic calendar.

Stocks Surge Higher. Dollar Give Backs the Gains

 

Dollar Index is giving back the gains. Wedge promotes a further drop

USD/CAD goes under 1.33 again

GBP/USD aims 1.32

AUD/NZD tries to establish presence above 1.084

DAX breaks crucial resistance on 12800

S&P 500 close to the all-time highs

CAC breaks the neckline of the H&S pattern

EUR/USD breaks mid-term down trend line

USD/JPY tries to close the day above 106

Gold drops and tests the 1980 USD/oz support

USD/PLN breaks the lower line of the wedge

USD/CHF on the other hand, breaks the lower line of the flag

GBP/JPY tests the upper line of the sideways trend

Markets Before NFP. Daily Briefing 7/8/20

The DAX is testing the 12540 level after bouncing from 12800

The USDJPY is on the way to test the 106 level again

The EURPLN is trying to create a double bottom at 4,4

The EURUSD is heading lower after bouncing from 1,19

The USDCAD is seeing a false bearish breakout ahead of important job data

The AUDNZD is creating a fourth flag in a row

The CAC is seeing a false bullish breakout

The GBPUSD has bounced from the crucial resistance of 1.317

For a look at all of today’s economic events, check out our economic calendar.

Three Instruments and Three Breakouts of Absolutely Crucial Resistances

The first instrument is traders’ beloved GBPJPY. Often chosen by speculators thanks to its volatility. For the past few days, pair was in the sideways trend, which could have been described as a descending triangle pattern. The formation was not fully reliable as the best signals it gives in a downtrend. Nevertheless, the price broke the upper line of this formation today, which in theory brings us a proper buy signal.

Now AUDNZD, which today is making a crucial long-term movement. Despite the better data from New Zealand, the price is heading higher, so NZD is getting weaker. The reason why this movement is important is that the price is currently testing major long-term horizontal resistance. Buyers are testing this level since September 2019 and they did not manage to close the day above the 1.084 resistance. Price closing a day above, can be a proper buy signal.

The last one is French CAC, which is getting ready for a bullish wave. The price created an inverse head and shoulders pattern and already broke its neckline. What is more, CAC broke the mid-term down trendline and the horizontal resistance on 4900 points. As long as we stay above this level, the sentiment remains positive.

For a look at all of today’s economic events, check out our economic calendar.

AUD/NZD Technical Analysis: Uptrend Continuation

Dear Traders,

The AUD/NZD is in uptrend. Bullish head and shoulders pattern marks a potential continuation to the upside.

1.0700-20 zone is showing buyers and a “slingshot” trade. The market is above the middle Bollinger Band (daily BB) and its gaining momentum to the upside. We should see a bounce off the zone and a potential move to 1.0759 and 1.0771. Above 1.0771, 1.0804 is the target. If W L3 holds, this scenario is likely to happen.

The Analysis has been done with the CAMMACD.Core and Sit Systems

For a look at all of today’s economic events, check out our economic calendar.

 

AUD/NZD Looking to Break 1.0680

Dear Traders,

The AUD/NZD has formed another leg in technical uptrend and we should see a continuation move up. My entry is 1.0635 and we are still going up.

Much better than expected Australian and Chinese Trade Balance data reflected positively on the AUD crosses. Trade Balance represents the difference in value between imported and exported goods and services during the month. POC zone is 1.0625-35 so we are seeing the bounce. The first target is 1.0677. If the market closes above 1.0680, then 1.0754 should be the next.

The Analysis has been done with the CAMMACD.Core and Sit Systems

 

Friday Setups: Oil, AUD/NZD and Dollar Index

Today let’s start our analysis with an update from Poland; The number one spot on the stock exchange is now occupied by a gaming company called CD Project. You probably recognize some of the games they’ve released like ‘The Witcher’ and ‘Cyberpunk2077’. It’s interesting to see that in these times, usual conglomerates such as Orlen, an oil & gas company or KGHM, one of the biggest copper and silver producers in the world are no longer helming the stock exchange.

Back to our usual assets, oil surged yesterday after U.S. president Donald Trump commented that an agreement between Saudi Arabia and Russia may happen. This is in line with the technical situation; as we mentioned yesterday, the price was above the 21.1 USD/bbl. level, so there’s a good chance for a short-term upswing. What will happen now is based on speculation, but keep in mind, traders just bought the rumor, so we can base our next moves on what we think they will do with the facts.

Next, we’re moving onto a rather unusual pair for our analysis, the AUDNZD. The pair has shown an interesting setup on the weekly chart, where the price is currently creating a shooting star. The place of this candle is not random; after an earlier test, the price created this candle under two important resistances – the dynamic and the horizontal one. Based on all the above, the pair is looking at a long-term negative sentiment.

Lastly let’s take a look at the Dollar Index; it has shown us that appetite for the USD is back. The price used the inverse head and shoulders patter to come back above the 38,2% Fibonacci retracement level. Buyers are not stopping and it seems that they are aiming to hit the 23,6% Fibonacci level. Based on the current momentum, they should hit it soon.

AUD/NZD Going for Higher Levels

Dear Traders,

The AUD/NZD is targeting higher levels. We should see a continuation move due to ascending scallop pattern.

The market is above W H3 camarilla pivot. A continuation move above should target 1.0488 W H4 camarilla pivot and M H5 1.0492. A close above should make the price spike towards 1.0537 W H5 camarilla. As long as the price is above W L3 1.0400, the market is bullish. Buying the dip continues.

The Analysis has been done with the CAMMACD.Core and Sit Systems

 

Three Great Setups With Weaker AUD and Stronger NZD

It can be nicely seen on our first instrument: AUDCHF, where the price is drawing a beautiful hammer on the daily chart. This long tail, shows us a rapid strengthening of the CHF, followed by a fast reversal. In overall, the situation is negative. Few days ago, AUDCHF broke the lower line of the symmetric triangle pattern along with the horizontal support on the 0.669. Price closing below the orange support gave us a significant sell signal. Today’s hammer is really not changing much here.

I will continue with the AUD and show You an interesting setup on the AUDNZD. Here, yesterday, the sharp drop gave us a long-term sell signal. The pair broker the lower line of the descending triangle pattern and the lower line of a channel up formation. According to the all books about the technical analysis – that is a very negative situation promoting a further drop.

Two above setups show us a weakness of the AUD and the latest – additional strength of the NZD. Kiwi’s power can be confirmed by the situation on the EURNZD, where we do have a very handsome reversal. I must admit that this setup is really classic. We do have a bullish correction, ending on the down trendline, 23,6% Fibo and the horizontal support on the 1.68. In addition to that, the price draws a long head. Really it rarely gets much better than this. The pair is dropping quite significantly and there are big chances that we are going to witness new mid-term lows soon.

This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory

Not Such A Big Deal But Might Be Enough For The Santa Claus Rally.

China and the US have reached an agreement on a Phase One deal in which the US will halt December tariffs and reduce the 15% tariffs to 7.5% on the September USD120bn list.

So, the US only had to give up a small nominal rollback in tariffs apparently and a December tariff deferral in exchange for China’s commitment to purchase some form of US agricultural products totaling 40-50 billion per year over the next two years. Yes, we have a deal, but trade negotiations will continue; for now, escalation seems to be off the table. However, the path to the comprehensive agreement is still miles away.

Ultimately, phase one deal fell short of market expectations and is probably not enough to fully restore business confidence or generate a meaningful recovery in exports or investment.

But the big question for investors is will this Santa Claus rally still have legs?

The second half of December is typically associated with robust seasonal demand for risk assets and given the market has cleared three significant overhangs (US election, USMCA, December 15 tariffs). The optimist in me suggests that risk appetite among financial investors is now likely to remain high despite the expected gyration in the trade talk narrative. However, the pessimist in me thinks a limited deal means limited risk as investors turn cautious, ultimately viewing Friday’s partial deal as a short-term detente rather than a clear road to a lasting and comprehensive resolution of the trade tensions.

Still, given the way President Trump has played this affair out so far, I wouldn’t surprise me one bit to see some watered-down phase two deal in mid-2020 to goose the US economy a bit more ahead of the 2020 presidential election.

Traders will now be forced to consider the prospect of phase two trade deal and beyond, but for now, they might be just as happy to put trade in the rearview mirror for a few weeks and focus on the economic data

Critical for the Yuan and global risk sentiment is that China could kick start the week on a positive note with a rebound in high-frequency data.

Analysts expect China to report stronger consumption and production data. Retail sales growth is likely to accelerate to 8% in November, from 7.2% in October, while IP growth rises to 5.2% from 4.7% in the same period.

Although fixed asset investment (FAI) growth is likely to have moved sideways, unchanged from October at 5.2%yoy YTD in November, its rebound is expected in 2020, led by a recovery in infrastructure and manufacturing investments. At the minimum, the data is likely to support the view that China’s growth has bottomed.

Oil markets

Oil traders were happy that the December tariffs were deferred but not so comfortable that September USD120bn trade duties were only reduced to 7.5% when they were expecting a full roll back in September and far from the rumored 50 % across the board rollback.

None the less, oil futures closed 1.5% higher in New York on Friday, supported by a partial trade truce. Even a partial trade deal is good for oil as it adds another tailwind for oil into year-end, but frankly, it wasn’t much of a surprise.

However, last week, the IEA OMR was mildly supportive, flagging a cut to 2020 US production growth, which provides some evidence that US production growth estimates are too high. So, we could start to see the big forecasting agencies cut US production estimates, and then the market consensus view would then shift to a lower bias through 4Q19 and 1Q20. If this trend materializes, it could provide another year-end fillip for oil prices and offset concerns that the market is facing a massive supply glut and inventory build, at least in the first half of 2020.

However, with oil near a three-month high and the trade deal failing to meet market expectations, there is a risk of profit-taking into year-end. IMM oil positions jumped materially higher following OPEC decision to reduce output quotas, along with a promise to tighten compliance, so if there is limited risk appetite from a limited trade deal, oil markets could shift into profit-taking mode.

However, I continue to believe the medium-term outlook is good, positively supported by OPEC compliance and a possible shift downwards in US oil production growth estimates.

Gold markets

Gold rallies despite trade agreement, UK election, and USD gains, suggesting there is a lot more underlying resilience in the yellow metal than expected. Gold held up remarkably well in the face of a marked shift towards risk-on assets.

Reasons

  • US bond yields are likely capped as the US interest rate policy remains on lower for longer, if not lower forever mode.
  • Equity markets are looking a bit toppish, and that could trigger some defensive allocations into gold
  • Traders have now turned focus to the long and arduous road to a phase two trade deal. so, gold could do well on escalating trade tensions
  • The phase one deal fell short of market expectations and is probably not enough to fully restore business confidence or generate a meaningful recovery in exports or investment.

Still, without the Fed pivoting into a dovish stance and signaling a rate cut, explosive returns are unlikely until the US data shifts negatively enough to force the Fed’s hand.

Investors maintain a favorable attitude towards gold over the medium to long term; an environment of low rates, persistent macro uncertainty, and elevated equities makes a case for holding gold as a hedge and varier. This view could likely drive demand for gold higher into 2020 and lend support to the current medium-term uptrend. With the gold seasonality effect coming into the picture, investors may look back at the current price level with nostalgic longing at the end of Q1 2020. 

Currency Markets

The Pound

The million-dollar question facing Sterling traders is, will the much-touted 100 billion GBP of real money buying appear? Or will real money hedgers and FDI inflows wait for more certainty on the structure of the new EU vs. UK relationship?

Traders will turn focus to the Bank of England’s (BoE)decision this week. What to expect? Don’t expect any change to the Bank’s policy setting. Given the lack of communication since the November Monetary Policy Report, it’s unlikely there will be a rate change as the BoE usually telegraphs rate moves. But beware of a change in the voting split which could lean on the dovish sided and dent near term GBP sentiment.

Antipodeans 

The second half of December is typically associated with robust seasonal demand for risk assets and given the market has cleared three significant overhangs (UK election, USMCA, December 15 tariffs). Investors’ risk appetites may be supported despite the expected gyration in the trade talk narrative. This notion could bring focus on the AUD and NZD as traders begin the process of positioning for the Big global growth rebound trade of 2020

The Yuan 

The Yuan surged to below 6.95 Friday on what was thought to be a robust trade deal — but then backtracked after the reference rate fix, which held above 7, indicating an unwillingness for the PBoC to strengthen the Yuan quickly. Eventually, the Yuan gave up more ground and then traded above the 7 handles after as the market was disappointed by the details in the phase one trade deal and particularly the level of the tariffs rolled back. The Yuan momentum is a linear function of the degree of US tariff rollbacks.

The Ringgit

A partial trade deal is better than no deal and certainly a whole lot better than trade war escalation, which should reinvigorate demand for the Ringgit as the market has managed to navigate numerous worst-case scenarios this month successfully. But critical in this view, which should increase investor’s need for carry trade, is the less hawkish Fed who have signaled a lower for longer if not a lower forever interest rate policy.

Also, the Petronas deal is being viewed in a favorable light and attracting some foreign flows to the KLCI as Petronas stocks are a significant component of Malaysia’s key stock index and could also be stocking demand for the Ringgit.

This article was written by Stephen Innes, Asia Pacific Market Strategist at AxiTrader