AUDNZD – Potential Bearish Continuation Triangle
Background
I don’t have an in depth knowledge of the fundamentals of the 2 economies involved in the currency pair AUDNZD except to say that Australian economy might have larger component dependent on mining resources which is being affected by the trade war between USA & China. This might continue to have impact over several years.
Similarly, the 10 Year Yield difference (there isn’t enough data available to form clear view) appear to have narrowed to possibly form a double top and could begin to widen, ie to move back towards the region of 2017 low, around -0.63% (see chart below). This would suggest AUD might suffer weakness.
Summary of Technical
1. Monthly chart it seems like the current cycle commenced from March 2011 and dropped in 5 waves to form a low in March 2015. Since then it has gone into major triangle formation which has 3-3-3-3-3 structure. If correct then upon completion, it implies a continuation of the prior trend from March 2011.
2. Each of the lower tops in this triangle have posted Key Reversal on monthly with the last candle being that of July 208.
3. Temporary support is around 1.0850 and then around 1.045. Once these give way it is likely to decline with increasing momentum.
4. Since July 2000 each major swings appear to have time symmetry between low to high and high to low of around 64 bar. If this is repeated then we could project the potential decline to continue till August 2020.
5. Using the decline from March 2011 to March 2015, 127.2% of the Fib extension give us possible target of 0.95 and 138.2% around 0.9150
6. From Daily chart – similar fib extension of the triangle gives us 0.9360 and 0.8960
Potential entry – could be initiated upon break of temporary support around 1.0850 where we might see a break of trendline on monthly RSI
Warning: This is my interpretation of price action using TA approach which I consider helps me the most, but could be completely wrong. Therefore, as always, do your own analysis for your trade requirement and ignore my views.
For those who appreciate my analysis, select to follow me and the chart for notification of future updates. Indicate you like my analysis by thumbs up, comments and sharing it with others. If you have an alternative idea then, please be constructive and share for all to learn from.
Thank you for taking the time to read my analysis.
DanV
I don’t have an in depth knowledge of the fundamentals of the 2 economies involved in the currency pair AUDNZD except to say that Australian economy might have larger component dependent on mining resources which is being affected by the trade war between USA & China. This might continue to have impact over several years.
Similarly, the 10 Year Yield difference (there isn’t enough data available to form clear view) appear to have narrowed to possibly form a double top and could begin to widen, ie to move back towards the region of 2017 low, around -0.63% (see chart below). This would suggest AUD might suffer weakness.
Summary of Technical
1. Monthly chart it seems like the current cycle commenced from March 2011 and dropped in 5 waves to form a low in March 2015. Since then it has gone into major triangle formation which has 3-3-3-3-3 structure. If correct then upon completion, it implies a continuation of the prior trend from March 2011.
2. Each of the lower tops in this triangle have posted Key Reversal on monthly with the last candle being that of July 208.
3. Temporary support is around 1.0850 and then around 1.045. Once these give way it is likely to decline with increasing momentum.
4. Since July 2000 each major swings appear to have time symmetry between low to high and high to low of around 64 bar. If this is repeated then we could project the potential decline to continue till August 2020.
5. Using the decline from March 2011 to March 2015, 127.2% of the Fib extension give us possible target of 0.95 and 138.2% around 0.9150
6. From Daily chart – similar fib extension of the triangle gives us 0.9360 and 0.8960
Potential entry – could be initiated upon break of temporary support around 1.0850 where we might see a break of trendline on monthly RSI
Warning: This is my interpretation of price action using TA approach which I consider helps me the most, but could be completely wrong. Therefore, as always, do your own analysis for your trade requirement and ignore my views.
For those who appreciate my analysis, select to follow me and the chart for notification of future updates. Indicate you like my analysis by thumbs up, comments and sharing it with others. If you have an alternative idea then, please be constructive and share for all to learn from.
Thank you for taking the time to read my analysis.
DanV
Monthly with Indicators
MACD at zero line resistance and ADX seem to suggest that a new trend might develop with potential higher low being formed