• 657 days Will The ECB Continue To Hike Rates?
  • 657 days Forbes: Aramco Remains Largest Company In The Middle East
  • 659 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,059 days Could Crypto Overtake Traditional Investment?
  • 1,063 days Americans Still Quitting Jobs At Record Pace
  • 1,065 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,068 days Is The Dollar Too Strong?
  • 1,069 days Big Tech Disappoints Investors on Earnings Calls
  • 1,070 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,071 days China Is Quietly Trying To Distance Itself From Russia
  • 1,072 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,075 days Crypto Investors Won Big In 2021
  • 1,076 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,077 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,079 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,079 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,082 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,083 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,083 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,085 days Are NFTs About To Take Over Gaming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

  1. Home
  2. Markets
  3. Other

AUDNZD False Break Low?

In previous reports on the AUDNZD, I have stated that the longer term technicals appear bullish. Hence I have been looking for an opportunity to enter into long positions on this recent pullback. There was an aborted attempt around a month ago but there now appears another opportunity arising. Let's take a look at it using the daily chart.


Daily Chart

New Zealand Dollar (AUDNZD) (FX) 1 Day Candlestick Chart
Larger Image

I have drawn Fibonacci retracement levels of the upleg from the January 2014 low to recent June 2014 high. We can see that price came down a couple of days ago for a virtual direct hit on the 76.4% level which stands at 1.0618. This can be seen in the highlighted green circle

This low was also a marginal break of the May low of 1.0647 and with no follow through to the downside so far this low is shaping up as a false break low. False breaks are my favourite bottoming (and topping) pattern as I like to see the sellers flushed out. Stops would have been building below the May low so now that they have been taken out the coast is clear, so to speak. However, in this case we have a marginal break of not only the May low but the lower uptrend channel as well. A double false break shall we say?

I have also added a Relative Strength Indicator (RSI) and it can be seen that each of the last three lows is accompanied by a less weak RSI reading. So it appears we have a triple bullish divergence and it is generally after the third low with higher RSI reading that we can expect a significant move higher.

So it appears that conditions are ripe for a turn here. If this pans out as suggested then we can look further out in time in the next report.

 

Back to homepage

Leave a comment

Leave a comment