The AUDNZD has corrected sharply, but over the past few trading weeks it has slowly ground out a bottom as visible in this D1 chart. This currency pair corrected slightly after forming a higher high which took it back down to solid support levels. We expect the AUDNZD to attempt a breakout above its descending resistance line and rally into its descending 50 DMA. A breakout of its 50 DMA would open the way to 1.2000.
MACD indicates that momentum has improved, but the recent minor correction caused a gap between its histogram which dipped slightly into bearish territory and its moving average which remains in bullish territory. RSI is trading in neutral territory and managed to stay out of oversold territory which hints at an absence of sellers.
We recommend a long position at 1.1360. This would be an addition to our previous two long positions which we took on July 1st and July 12th at 1.1825 and 1.1625 respectively. We recommend also recommend a stop sell order at 1.1300 with a take profit target of 1.1225 in order to hedge this trade.
Traders who wish to exit this trade at a loss are advised to place their stop loss order at 1.1200. We will not use a stop loss order and execute this trade as recommended. Place your take profit target for all three long positions at 1.1700.
Here are the reasons why we call the AUDNZD currency pair higher
- The AUDNZD currency pair has corrected after forming a higher high and formed a higher low as it currently trades at solid support
- MACD indicated momentum has improved and a gap has opened between its histogram and moving average
- RSI is trading in neutral territory and did not breakdown into oversold territory
- Profit taking after a minor correction which will initiate a short-covering rally in order to realize trading profits
- New long positions by institutional swing traders
- Better economic as well as political climate out of Australia