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Short

AUD/NZD - Weakness at a supply area

OANDA:AUDNZD   Australian Dollar / New Zealand Dollar
AUD/NZD is showing weakness at an area of supply that has rejected price twice before. However, we're not looking at support and resistance , so the longer an area of supply/demand is tested, the weaker it becomes. But it's interesting that price has already dropped 20+ pips today (on a low trading volume day - Monday's always are!).

Price has made a run up to the monthly R3 CAM pivot , which provided support earlier this morning and held price for a few hours. It'll be interesting to see if that support has turned into resistance. If it has, it'd be a good area to enter a short trade.

Profit targets are difficult to determine. But somewhere in the vicinity of a 60-70 pip drop would be reasonable for a first wave.

I'll update this as (and if) it develops.

Cheers and good luck,
RJR
Comment: And this, ladies and gentleman, is why we wait for confirmation. The retest of the 1.0909 level failed, and price made a new high. We're well into the supply zone now, and money flow has started falling, creating our first solid divergence (see the chart).

I'm still waiting for confirmation to enter, but you may want to enter now at a high level. But you'll need a large stop loss to cover potential moves - which means money management is key.

Comment: AUD/NZD bounced perfectly off the monthly R3 CAM, and fell 50 pips overnight (Aus time).

It's found some resistance at 1.0930 due to entering a high volume zone. I'd still expect it to fall further, and trade balance and retail figures for AUD coming out today may (MAY!) push things further down.

Regardless, this is a longer term short unless something changes.

Comment: Correction: monthly R4 CAM.
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