AUDNZD Point 4 High (W)

We have been tracking a 5 point broadening low and I now believe the point 4 high to be in place at $1.1616. Let’s revise the situation using the weekly chart.


We can see the 5 point broadening low formation denoted by the numbers 1 to 4 with the expectation now that price will head down to put in a point 5 low.
This high spiked up before reversing back down immediately and showing a big wick on the upside. Previous analysis outlined the expectation that price would top out above the $1.1459 level which stemmed from the 38.2% Fibonacci retracement level of the whole move down from 2011 high to recent low. This has now occurred.
This high traded well above the upper Bollinger Band which is consistent with solid tops.
This high was also at resistance from the 200 period moving average denoted by the black line and this is the weekly chart so nothing to be sneezed at.
The PSAR indicator now has a bullish bias and busting the dots on the downside now will just add extra confidence that the top is in place. Until that happens however the potential exists for price to trade higher although that is not my expectation.
This high set up a bearish divergence on the RSI while the Stochastic and MACD indicators are both trending down and looking bearish.
Summing up, I believe we have a top in place and the downtrend is set to resume taking price to new lows below $1.0019.


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