AUDNZD has witnessed a sizeable downtrend since the third quarter, with price dropping into the lower 1.04 region. A brief rally to the top end of the descending channel now sees prices wane, as resistance at the specified area eyes consolidation.
The recent bearish divergence noted on the momentum indicator could see the decline of the currency pair to the mean. Should this ensue, then candlesticks would drop out of the Ichimoku cloud, leading to further downside.
A short-term outlook sees some choppy intraday price action. Currently, prices look to have exhausted from the 1.07 area as the pair drops to the mid-1.06 region.
The possibility of a hidden bearish divergence will not help matters if another attempt to the upside comes into play. Should momentum propel, then we could see another fall through the 23.6% of the 1.0628/1.0716 downside Fibonacci leg.
However, the specified divergence will negate if prices can push through the 38.2%, which would, in turn, lead to the 50%, which has a confluence of the base of the Ichimoku indicator.