Despite the pair breaking a monstrous trendline resistance (TR1) dating back to Aug ’15, the current price action provides limited clues for the medium-term.
One would assume that the breakout will take prices higher but this is not always the case. In fact, we see false breaks more often during the first attempt to break out of long-term regions. This suggests that a pullback can be expected. Otherwise, it could occur right after it takes out the upper trendline resistance (TR2) first.
What keeps bulls from intraday is the 1.074 support. A break of which could take the pair down towards the TR1 support. The projection is supported by the RSI (9) divergence.
In the 1-hour chart below we take a closer look.
The 1.074 support seems to be a strong confluence level. There, a previous high, the TR1 trendline, and the regression line of the short-term channel (black) intersect.
With the regression line of the medium-term channel (grey) having caused a short-term pullback to 1.074, AUDNZD is trapped within a consolidating regression-infused area.
A pullback could take us down to the lower channel lines before getting to TR1 support. There we will have a clearer picture. Note, however, that until then, we have added the 1.070, 1.067, and 1.064 on our watchlist.
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