I’m seeing an ascending channel setup for AUD/NZD, and I think the upcoming RBNZ rate statement could be a good catalyst for a bounce. Check it out!
This pair previously broke past a strong range resistance visible on the longer-term charts, signaling that bulls are gaining traction. I’m seeing an ascending channel on the 4-hour time frame and it looks like price is ready to pull back to support around 1.0850-1.0900.
Initially, I thought of going long at the mid-channel area of interest which appeared to be keeping losses in check in the earlier sessions. However, I got wind of reports showing that iron ore prices have tanked recently and chalked up their largest one-day fall since mid-December last year. To top it off, New Zealand just reported a 1.7% rebound in dairy prices during the latest Global Dairy Trade auction so the Kiwi might be enjoying a bit of support.
Because of that, I decided to look to the longer-term channel support as a potential entry point. I haven’t set actual entry orders yet but I’m planning on going long somewhere around the 1.0860-1.0875 area of interest once reversal candlesticks form.
I’m bearish on the Kiwi because I’m expecting a bit of dovishness from the RBNZ this week as New Zealand’s trade numbers haven’t been looking so healthy. GDP growth was much weaker than expected in Q4 2016 and January’s trade balance is hinting at slower business production in the coming months.
Then again, there’s also a slight chance that RBNZ head Wheeler could look at the bright side of things and emphasize how the Kiwi’s depreciation could support growth down the line. Aside from that, annual CPI is in line with the central bank’s expectations so far, which means that policymakers might not sound too worried this time.
Here’s my plan:
Long AUD/NZD at 1.0875, stop loss at 1.0725, profit target at 1.1075 for a potential 1.67-to-1 R:R.
This pair previously broke past a strong range resistance visible on the longer-term charts, signaling that bulls are gaining traction. I’m seeing an ascending channel on the 4-hour time frame and it looks like price is ready to pull back to support around 1.0850-1.0900.
Initially, I thought of going long at the mid-channel area of interest which appeared to be keeping losses in check in the earlier sessions. However, I got wind of reports showing that iron ore prices have tanked recently and chalked up their largest one-day fall since mid-December last year. To top it off, New Zealand just reported a 1.7% rebound in dairy prices during the latest Global Dairy Trade auction so the Kiwi might be enjoying a bit of support.
Because of that, I decided to look to the longer-term channel support as a potential entry point. I haven’t set actual entry orders yet but I’m planning on going long somewhere around the 1.0860-1.0875 area of interest once reversal candlesticks form.
I’m bearish on the Kiwi because I’m expecting a bit of dovishness from the RBNZ this week as New Zealand’s trade numbers haven’t been looking so healthy. GDP growth was much weaker than expected in Q4 2016 and January’s trade balance is hinting at slower business production in the coming months.
Then again, there’s also a slight chance that RBNZ head Wheeler could look at the bright side of things and emphasize how the Kiwi’s depreciation could support growth down the line. Aside from that, annual CPI is in line with the central bank’s expectations so far, which means that policymakers might not sound too worried this time.
Here’s my plan:
Long AUD/NZD at 1.0875, stop loss at 1.0725, profit target at 1.1075 for a potential 1.67-to-1 R:R.