This is a good set up regarding the AUDNZD pair, the chart being viewed is from the 4 hour chart. We can see some structure develop as it continued to drop but recently that strength was broken and currently we're retesting that strength.
What you cannot see from the 4 hour chart is why this location that the market chose may be much more than just a 4 hour swing trade.
We jump to the weekly chart shown below:
Descending are almost always a sign of a temporary reversal back to the point where the strength began. When descending are formed on lower time frames against relevant key technical levels on higher time frames they help traders pinpoint excellent risk/reward long term entries. This is the type of setup that we're currently viewing on AUDNZD .
The 4 hour chart has confirmed the break of the strength indicating that we have a strong chance of rising back to 1.10000 area over the next couple to several days. When (and if) this happens, by that time the look of the daily and weekly candles has changed to further reinforce this perspective.
Strong long term targets will be 1.13 and 1.15 areas, easily identified as to why on the weekly chart. There is a low chance on the monthly long term that we can see above 1.2+ which would relate to a prior analysis on this pair that failed to confirm a pattern, this analysis is still a possibility but the market would have to be very aggressive towards that completion over the next few trade weeks. I think we all know that anything is possible in the market - so it's good to keep it in mind. Alternatively, this enormous structure could break the lower support - but this type of trade is more than likely months away.
Keep an eye on the 4 hour chart as we finish the 2nd half of this trade week. Patience is always key.
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