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Watchout for AUD/NZD breaks below 1.0707, tests of 1.0620 likely

FX:AUDNZD   Australian Dollar/New Zealand Dollar
134 0 4
AUD/NZD             bears unable to push the pair below 1.0707 (a double bottom tested on 9th and 10th Dec             ).

Price action has re-entered hourly cloud and on the day AUD/NZD             has been supported by cloud base at 1.0728, daily Stochs are in an oversold zone and will see some unwinding soon.

A close above the 200-DMA at 1.0823 would be very encouraging, bulls could then take the pair to 1.10 and further above to 1.1260.

However the prospect of the AUD starting to trend higher are becoming increasingly remote, multi-year lows for oil             and iron ore, culminating in 13-yr lows for the broader CRB index, are additional AUD headwinds.

Emerging markets are already feeling the strain as the FOMC decision draws near, and can ill afford any China-induced volatility.

We feel AUD/NZD             has further downside to go, breaks below 1.0707 could see the pair test trendline support at 1.0620, which could then provide good entry levels for a long.

Resistance Levels:

R1: 1.0785 (Session high Dec             11)

R2: 1.0823 (200 DMA)

R3: 1.0843 ( Dec             10 high)

Support Levels:

S1: 1.0728 (Cloud base)

S2: 1.0707 ( double bottom tested on 9th and 10th Dec             )

S3: 1.0620 ( trendline support)
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