AUD/NZD Price Forecast: Bearish
Australian Dollar Price Outlook: AUD/NZD Threatens Bearish Reversal
The Australian Dollar has enjoyed recent gains against many of its major counterparts as risk appetite drives demand for the grow-sensitive Aussie. AUD/NZD has been an exception since August, however, and the pair was locked in a downtrend until December. The final month of the year offered some respite for the Australian Dollar which saw AUD/NZD climb quickly from 1.0417 to the 200-day moving average just north of 1.0715.
AUD/NZD Price Chart: Daily Time Frame (October 2019 – December 2020)
In conjunction with resistance offered by the 200-day moving average, AUD/NZD reveals waning momentum with a series of daily candles with long upper wicks. Further still, the recent formation of a death cross in mid-November could suggest the pair is vulnerable to a continuation lower. Thus, levels of invalidation if bearish exposure is to be explored can be set above the nearby 200DMA – perhaps around the November high.
AUD/NZD Price Chart: 4 – Hour Time Frame (July 2020 – December 2020)
Early areas of interest may exist around 1.0600 and slightly beneath where the 200-period moving average resides on the 4-hour chart and the 50-day moving average rests. Secondary levels of note could materialize around the mid-point of the pair’s range from March to August around 1.0521.
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While there is little to suggest AUD/NZD rates will fall unabatedly in the days ahead, the technical landscape suggests weakness is on the horizon which is sufficient evidence to leave me with a bearish bias. Follow @PeterHanksFX on Twitter for updates on this pair.
–Written by Peter Hanks, Strategist for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX
