The recent price action again reached a level not far from the several high points of 2015.
In this particular case, it almost equals the maximum of September 2015, where, as we can see on the below chart, there is a potential double top in formation, which still lacks confirmation obviously.
Chart from Saxo Bank; AUDNZD_H8
We believe however that this pair is in a good position for a short opening with a quite acceptable R/R, although this has not been the best entry point.
We did not enter into this consideration with any fundamental aspects. If anything, the recent evolution of GDP appears to be a bit more resilient in New Zealand than in Australia.
Anyway, let's look at the levels to monitor:
- If it holds today's downward trend, the first level will be 1.1150, very close to the recent lows, where probably this pair will stop to possibly evolve into a range mode.
- The second level to watch is the 38.20% Fibonacci retracement at 1.1075 or so.
- The third level corresponds to 50% Fibonacci retracement at 1.1000 or so, which corresponds to the maximum seen in January 2016 .
If the market moves in our favor, a first gains withdrawal will be in 1.1150 (aforementioned bottom range).
The rest will be open, hoping for a bit above 1.1000 or so, however, Mr. Market will decide.
The stop loss is placed above the today's maximum and will be moved to the break even soon as possible..
