By Dan Eduard – The following is the daily chart for AUD/NZD. As will be shown through a number of technical indicators, the pair is likely due for a downward correction in the near future. The indicators used are the 7-day Relative Strength Index (RSI), the 14-day Relative Strength Index (RSI), and the Stochastic Slow.
1. The 7-day RSI is shown already dipping below the upper resistance line. This typically indicates that the pair is has gone into overbought territory and will likely reverse course soon.
2. The 14-day RSI also shows the pair is in overbought territory, although it has not crossed the upper resistance line. More conservative traders will probably want to wait until the line is breached before entering into sell positions.
3. The Stochastic Slow lines show a bearish cross occurred on the 14th of this month. This typically means that a bearish correction will take place relatively soon, supporting the data from the other technical indicators.
