AUDNZD | Hidden Bullish Divergence | AB=CD

awaisulabdeen Updated   
FX:AUDNZD   Australian Dollar / New Zealand Dollar
AUDNZD chart currently shows the formation of AB=CD patterns, indicating a Potential Reversal Zone (PRZ). Additionally, there is a hidden bullish divergence, confirming a bullish trend. Both indicators collectively suggest that the trend has shifted to an uptrend.

In technical analysis, an AB=CD pattern is a harmonic pattern used to identify potential reversal zones where the price might change direction. The completion of this pattern at the PRZ suggests an area where traders might anticipate a shift in the prevailing trend.

The hidden bullish divergence further supports the notion of an uptrend. This occurs when the price forms higher lows, while the corresponding indicator (such as the Relative Strength Index or RSI) shows lower lows, indicating underlying strength in the bullish momentum.

Taken together, the presence of AB=CD patterns and the hidden bullish divergence provides a stronger indication of a shift to an uptrend in the AUDNZD chart. Nevertheless, traders should conduct a thorough analysis and consider other factors before making trading decisions, as market conditions can change, and relying on multiple indicators enhances decision-making accuracy.

On the 1-hour time frame, there is a hidden bullish divergence, and an Inverse Head & Shoulders pattern has formed, both indicating a potential reversal. Additionally, according to Dow Theory, the market is printing new higher highs (HH) and higher lows (HL).

A hidden bullish divergence occurs when the price forms higher lows, but the corresponding indicator (such as the Relative Strength Index or RSI) shows lower lows. This signals underlying strength in the upward momentum.

The Inverse Head & Shoulders pattern is a bullish reversal pattern characterized by three lows, where the middle low (head) is lower than the two outer lows (shoulders). Its formation suggests a shift from a bearish to a bullish trend.

According to Dow Theory, a bullish trend is confirmed when the market prints new higher highs and higher lows. This aligns with the idea that, in an uptrend, each successive high and low should be higher than the previous ones.

In summary, the confluence of a hidden bullish divergence, an Inverse Head & Shoulders pattern, and adherence to Dow Theory principles collectively suggest a strong indication of a potential bullish reversal on the 1-hour time frame. However, it's crucial to consider other factors and perform comprehensive analysis before making trading decisions.
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