AUD/NZD traded lower today, breaking below the 1.0648 barrier, marked by the low of Mar. 8. This confirmed a forthcoming lower low and, combined with the fact that the rate is also trading below the downside line taken from the high of Mar. 4, paints a negative short-term picture.
In our view, the dip below 1.0648 may have opened the way towards the 1.0620 zone, which is near the inside swing high of Jan. 18. Suppose the bears are unwilling to stop there. In that case, a lower break could carry larger bearish implications, perhaps setting the stage for declines towards the 1.0585 territory, which acted as a temporary floor between Jan. 3 and 19.
Shifting attention to our short-term oscillators, we see that the RSI lies slightly above 30 and still points down, while the MACD runs below both its zero and trigger lines, pointing south as well. Both indicators detect high downside speed and corroborate our view for further declines in this exchange rate.
To start examining whether the bulls have gained the upper hand again, we would like to see a clear break above the 1.0725 barrier, which provided resistance on Mar. 10 and 11. The rate will be well above the aforementioned downside line taken from the high of Mar. 4, while the break above 1.0725 will confirm a forthcoming higher high on both the 4-hour and daily charts.
The bulls could then climb towards the peak of Mar. 7, at 1.0767, the break of which could allow extensions towards the 1.0795 zone, which provided resistance on Feb. 16 and Mar. 3.
