AUD:NZD - potential for reversal leading into RBA rate decision

CMC Markets


As the chart below shows Aussie:Kiwi is in the early stages of a possible inverse head and shoulder pattern.

With the RBA meeting tomorrow it may be worth having this on the watch list just in case.

I haven't shown it here but the current formation coincides with a longer term trend line support going back to October 2009. 

The standard approach to this inverse head and shoulder is only to buy if there is a break above the neck line resistance. Unless this occurs the pattern is not completed so early days only at this stage. If instead we drop too far below the recent low this would negate the set up.

If we get a set up I'll post some thoughts on trading strategy



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