AUD/NZD: Long term base being questioned by persistent failure to sustain interim gains – Westpac

Although daily momentum signalled interim rebounds for AUD/NZD cross, the faltering at neutral levels and the failure at 1.0550 open the risk of another spike lower, suggests Tim Riddell, Research Analyst at Westpac.

Key Quotes

“A slide below 1.0400 could trigger a sharp retest of the 1.0240-1.0300 area. A burst above 1.0600-25 is needed to break the near term downside bias’

“Weekly

• Weekly momentum duly led to further corrective pullbacks, but indicators are now at extremes and raise the risk of rebounding if support develops
• Price action continues to gyrate around 1.0625. A break of rising support at 1.0350 could trigger a retest of the low 1.02’s before another base is formed”

“Monthly

• The potential turn in monthly momentum faltered. Indicators now appear to be more neutral, even if 2015’s 1.0200 low is still favoured as a structural base
• Overlapping price action since 2H 2015 suggests that a frustrating and volatile long term base is still forming before of a potentially dynamic uptrend develops”