AUD/USD validating bearish pattern, NZD/USD poised to do same
AUD/USD snapped a corrective price pattern, looking towards June and January lows in the coming days and weeks, with NZD/USD set to follow.
AUD/USD and NZD/USD technical highlights:
- AUD/USD validated corrective rising wedge
- Looking for June, January lows on further weakness
- NZD/USD to follow with its own breakdown
AUD/USD validated corrective rising wedge
AUD/USD has come off with a fair amount of vigour in the last few sessions, as the US dollar is finding bids across the board. The drop late last week snapped the underside trendline of a corrective wedge formed over the past few weeks.
Pattern validation is not only within the context of a downtrend in place since January 2018, but also after the price tested a trendline from December and came very near the 200-day moving average (MA). The breakdown is carving out a lower low from 10 July, further undermining Aussie’s technical backdrop.
There may be a bounce soon, but given the technical damage and general tone it is likely to be seen as short-lived. The next anticipated area where a meaningful low may potentially form, is the 18 June low at $0.6831. A move beyond last month’s low will have in focus the January flash-crash low at $0.6744.
Start learning today about forex and how it works
AUD/USD daily chart (validated rising wedge)
NZD/USD to follow with its own breakdown
Kiwi has held up a bit better than its sibling, Aussie, but as goes one typically goes the other, just to varying degrees of strength and weakness. If NZD/USD can solidly snap the underside trendline of its corrective pattern, then look for it to trade lower.
First up as support is the 10 July low at $0.6565, followed by the 2015 trendline and May/June lows, which are in near confluence. The $0.6500-$0.6480 area should be a big spot to watch for a bounce to develop if Kiwi trades to that point.
NZD/USD daily chart (looking to snap corrective pattern)
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
