Still no Brexit deal in the UK Parliament. As mentioned in our previous analysis, Pound does not care too much about this. On Friday we had movements in both directions, on Monday rises and today we can see a drop. Clearly another rejection does not play a big role here. Let’s look for trading occasions elsewhere. Overnight and early in the morning we had a rate decision and the statement from the RBA. Rates remained unchanged but the statement was dovish. This was a bearish trigger for the currencies from antipodes: AUD and NZD.
First instrument in our analysis will be AUDUSD. The pair is aiming to test the crucial horizontal support on the 0.707. For the past two weeks, that area was proven as an important stronghold for the buyers. If the price will manage to break this support, we will receive a strong sell signal. As long as we are above, buyers can still feel relatively safe.
Correlation between the AUD and NZD is obvious so the Kiwi is also going down. The best setup ca be spotted on the NZDCAD, where we do have a bearish engulfing on the weekly chart along with the false breakout above the down trendline. Sell signal is pretty strong here, at least from the technical point of view.
Last instrument is the EURUSD, where we can clearly see the power of the false breakout pattern. Recently we had two of them and both of them brought us nice, directional movements.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis