Chart of the week – AUD/NZD
AUD/NZD potential bullish breakout from 4-week downtrend
Short-term technical analysisclick to enlarge chart
source: CMC Markets
Time stamped: 1 May 2021 at 2:30 pm SGT
- The on-going multi-week decline of 242 pips (-2.21%) from its 29 March high of 1.0947 to its recent low of 1.0705 printed on 30 April has started to flash exhaustion signs where the price action of the AUD/NZD may see a bullish reversal at this juncture.
- Several positive elements have emerged; the last 5-day of slide from its 26 April high of 1.0802 to 30 April low of 1.0705 has taken the form of an impending bullish reversal “Descending Wedge” configuration and in conjunction, the 4-hour Relative Strength Index (RSI) indicator has flashed out a bullish divergence signal at its oversold region on 30 April. These observations suggest that the downside momentum of the 4-week downtrend in place since 29 March has abated.
- 1.0715 key pivotal support and hourly close above 1.0780 may see a potential push up towards the 1.0860 immediate resistance in the first step.
- On the other hand, a break with an hourly close below 1.0715 shall put the bulls on hold for an extension of the on-going down move to test the major ascending trendline from 15 March 2020 low now acting as a support at 1.0670.