AUDNZD – Testing key level
2nd August 2016
Our signals for sentiment in AUDNZD have been negative since last April when the spot prices traded through the 21 week moving average and RSI traded beneath it’s own average line.
Prices traded almost 6 big figures lower after that break until finding some profit taking support near 1.0300 and a 76% correction to the April – June 2015 improvement.
I’d like to take the opportunity in this update to touch upon 2 important levels;
Firstly the strong July rally took AUDNZD back to the 21 week moving average and for 3 consecutive weeks that point attracted selling interest (the market marginally failed to test the RSI average).
That culminated in last week’s renewal of the downside that, with this week’s extension of losses has taken AUDNZD to the second important point to mention. This is a Marabuzo line created by the strong upside created 3 weeks ago. This level, 1.0503, is going to be exceptionally important on a weekly closing basis.
Failure to break it may well be the first chink in negative sentiment’s armour, although we’d need to see a weekly close above the moving average as confirmation. Whereas a close below would confirm the bearish trend is intact with the market then expected to refocus on last month’s bottom then 1.0248.
