- AUD/NZD bulls stepping in on what could be a significant reversion back to the mean.
- The 50% mean reversion level has a confluence with prior structure.
AUD/NZD has fallen hard on the back of the latest Reserve Bank of New Zealand in the past 24-hours printing a daily low of 1.0687 and losing some 140 pips.
However, in doing so, the daily chart has also left a bullish M-formation from which a reversion back to the mean of the drop would be expected as it has confluence with old support.
The following illustrates how this could play out in forthcoming sessions.
Daily chart
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