In today’s chart, we’ll be looking at AUDNZD on the four-hour frame.
Any questions or comments, please leave them in the section below, or you can contact me directly at firstname.lastname@example.org.
Now since it’s the Thanksgiving holiday over in the US, the markets are relatively quiet without US participation. It’s why we’ve decided to side-step significant FX crosses today and look at this minor pairing instead.
That’s not to say this pairing doesn’t have anything interesting to offer in terms of analysis. Generally speaking, these two currencies are so similar that any slight difference in fundamentals can generate significant moves.
Speaking of big moves, we can see the AUDNZD had one of these earlier in the month falling almost 120 pips and dropping well below the 200-day moving average.
Since then, the price has had a steady grind lower towards this 1.05 region, where I suspect it may have found a short-term bottom in the market.
If we study the RSI indicator, you’ll notice that since around November 14th, despite many attempts to stabilise the price, we haven’t managed to break or stay above these 40 levels on the indicator until today.
It suggests that despite being heavily oversold for quite some time, there have still been enough sellers coming into this market and not enough overall demand.
The thickness of the Ichimoku cloud sitting above price action is a further clue to the level of resistance the pair has faced during recent sessions.
As mentioned today is the first time we’ve seen a push about these 40 lines on the four hour chart, which may be a sign that buyers are now prepared to dip their toes in the water and potentially provide some much-needed support for the pair.
On the longer-term daily chart, notice how the downward progression is beginning to slow as the price hovers around the 200 MA.
Also, on the longer-term RSI, we have now reached massively oversold levels last seen in March/April this year from which price rebounded in quite a strong fashion.
Judging by the Ichimoku cloud, we could potentially see a longer-term rebound back towards the 1.07 level if the Australian Dollar was to mount a strong recovery.
By Adam Taylor
Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs. Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.