By Greg Holden – The recent trend which has been forming on the AUD/NZD daily chart appears to have come to an end today. After a month of consolidating towards the 1.2400 price level, the New Zealand Dollar (NZD) seems to have gained the upper hand. The pair breached out of its consolidation trend in a downward direction and currently trades near 1.2350. Our technical indicators, as detailed below, seem to suggest that this downward momentum could sustain itself for the next few days.
The indicators I’ve used here are the Relative Strength Index (RSI), the Stochastic (slow), and Auto Trendlines.
The area of the chart indicated by Point 1 shows us the Auto Trendlines which were superimposed onto the chart using this new indicator and clearly displays the break-through point taking place yesterday. A breach such as this typically indicates that the new direction of the currency pair will be in the same direction as the breach for a number of the subsequent candlesticks.
The RSI at Point 2 demonstrates that the pair currently floats in what is considered neutral territory and points downward. We can deduce from this that there is no strong pressure in either direction and the current movement will likely continue until such pressure becomes evident.
The Stochastic (slow), indicated by Point 3 in the chart, shows that a bearish cross formed a few days back and what we are now seeing is the correlating downward movement. Since this indicator has yet to drop below the 20 line we can assume that the momentum for this pair remains downward.
AUD/NZD Daily Chart
Forex Market Analysis provided by Forex Yard.
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