AUD/NZD Price Action
The AUD/NZD pair is one that is not widely traded or followed by British, American and European traders (who make up the majority of my readers), but it is still one that is worth watching because it can throw up some decent trading opportunities from time to time.
Having not looked at this pair for several days, I have just been looking at the recent price action, and it would appear that this pair has been slowly trending upwards in an ascending triangle pattern.
However in recent days it has been trading close to the lower trend line and is starting to show a little weakness with no real momentum to push higher.
Furthermore, the EMAs that I like to use, namely the 20, 50, 100 and 200-period exponential moving averages, are now very close to one another, which is exactly what we want to see before a big breakout.
Trading Opportunity
There is always the chance that the upward trend will continue and the price will move back up towards the upper trendline, but if the price does actually fall below 1.0870, it represents a much better trading opportunity in my opinion.
A downward break of the trendline, combined with an EMA breakout would be a good example of a high probability set-up and one that might be worth trading.
This is particularly true when you consider that if the price does fall below this lower trendline, it should close below the EMA (200), which the markets always pay close attention to, and will often act upon accordingly.
(Please note I am not recommending any trades. These are just my own personal thoughts and opinions).
Regarding price targets, you would have to say that if this scenario does play out, then the price of the AUD/NZD pair could easily fall to 1.0600, and if the 20, 50 and 100-period EMAs cross below the EMA (200), there could be enough momentum for the price to go a lot lower than this in the coming weeks and months.
With channel breakouts, you always want as many factors in your favour as possible, and in this case you will have the added weight of the EMAs breaking out of their consolidation and a downward cross of the EMA (200) if the price does indeed break out of its ascending channel and close below 1.0870. So this is potentially a decent set-up for anyone who is looking to take a position on this pair.
Leave a Reply