The Australian dollar collapsed recently against most major currencies, including the New Zealand dollar. The AUDNZD pair traded as high as 1.1294 recently, but failed to break the mentioned resistance area and traded lower. The New Zealand Business NZ Purchasing Managers’ Index was released earlier during the Asian session. The outcome was on the positive of the NZDUSD pair, as the Business NZ PMI came in at 56.5, up from the previous reading of 53.5. More importantly, the previous was revised up from 53.0 to 53.5. This helped the New Zealand dollar, especially against the Australian dollar.
There was a critical bullish trend line on the 4 hour chart of the AUDNZD pair, which was broken recently by the Aussie sellers. As of writing, the pair is testing an important confluence support area of the 200 moving average and 61.8% fib retracement level of the last move higher from the 1.0935 low to 1.1294 high. There is a chance that the pair might bounce from the current or a bit lower levels. However, in that situation, the pair might find resistance around the broken 100 moving average, which could act as a pivot zone for the pair. There is a lot of pressure on the Aussie bulls, which might continue and take the AUDNZD pair lower in the near term.
On the downside, a break and close below the 61.8% fib level might call for a test of the previous low of 1.0935. However, it is most likely to head towards the 1.236 extension of the last move.
Overall, selling rallies look like a nice option as long as the pair is trading below the 100 hourly moving average.
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Posted By Simon Ji of IKOFX
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