HomeForex TradingFX Play of the Day: AUD/NZD’s 1-Hour Reversal within the Making

FX Play of the Day: AUD/NZD’s 1-Hour Reversal within the Making

AUD/NZD simply broke a key assist stage this week!

In case you missed it, the New Zealand greenback was one of many weakest currencies final week after a slower-than-expected CPI report inspired speculations of the RBNZ following its friends by ending its price hike cycle too.

AUD, which additionally took hits from threat aversion, nonetheless managed to achieve pips on NZD although. The truth is, AUD/NZD traded above a development line assist for a lot of the week.

AUD/NZD 1-hour Foreign exchange Chart by TradingView

However that was final week.

AUD/NZD not solely broke its development line assist since then, nevertheless it’s additionally at present buying and selling beneath the 1-hour chart’s 100 and 200 SMAs.

Are we taking a look at a legit draw back breakout?

It might be that merchants are pricing in decrease inflation numbers from Australia.

See, markets count on the report back to replicate additional deceleration in quarterly and annualized client costs in Q1.

If we do see a slower CPI, then there can be even fewer causes for the Reserve Financial institution of Australia (RBA) to return to its rate-hiking methods.

In case of a CPI slowdown, you’ll be able to quick AUD/NZD to the 1.0800 psychological stage or the 1.0790 inflection level.

If you happen to suppose that AUD/NZD’s breakout is legit however that AUD will see some extra shopping for earlier than making new weekly lows, then you’ll be able to take into account promoting on the post-breakout pullbacks.

I’m eyeing the 1.0870 Pivot Level and 100 SMA ranges because it’s additionally close to the damaged development line assist, however I’m not discounting some promoting on the 1.0850 minor psychological stage.

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