AUDNZD Breaks Major Support (D)

Sometimes the best laid plans come to nought and that appears to be the case here. While the move down was identified, price has continued south and recently broke a key support level outlined in previous analysis. Let’s take a quick look.


The higher horizontal line denotes the July 2014 low level which is 1.062. This was major support which was outlined in previous analysis. Price breaking this major support level immediately changed my bullish outlook. 
Breaking that level has predictably seen price trade down to the January 2014 low and even trade a whisker below it. There is only a few pips in it but that means all time lows have now been recorded.
Now, provided some buying support comes in here, this brings into play a double bottom pattern. Double bottoms are great for traders that play the expected reaction but they generally do not end trends so once any rally plays out price should then come back down and make further record lows.
The Relative Strength Indicator (RSI) and Stochastic indicator are both showing little bullish divergences so perhaps price will rally from here setting up a double bottom pattern.
The Bollinger Bands show price recently moving away from the lower band so that is further evidence that price may indeed rally. Price is still only a few pips away from new lows and breaking down now would likely see another steep decline that gets back in touch with the lower band. 
If price does rally from here I have added some Fibonacci retracement levels of the move down in order to help determine where the rally may end. The downtrend looks to be quite strong so I would favour a minor rally only say back to the 38.2% level at 1.0798.
So while it is disappointing price didn’t set up a higher low, we just have to guided by the market. 


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