There is a possibility of AUD appreciating in the coming weeks if the current technical formation is anything to go by. First, it’s clear that the stochastics is turning from deep the oversold territory in the weekly chart and that’s not all. There is a buy signal in place with candlestick turning from the 61.8% Fibonacci retracement level in the weekly chart.
When we zoom in to the daily chart, then we can see momentum taking the lead pushing prices higher. Like the weekly chart stochastics, buyers are actually turning from the same zone and here is the thing with this. While everything seems awesome, caution should be practiced. In this case, I will only recommend buys when prices are trending above the 50% Fibonacci retracement level at around 1.0815 and the reason is simple.
More often than not, my entry condition is valid if there is a pull back in lower time frame like the 4HR chart. In our case, prices are actually rallying and since we have 4 more days to go, I will wait for prices to cool off and buy from around the 38.2%-50% Fibonacci retracement level drawn from last week’s high low. Odds of higher highs will also be great if a stochastic buy prints anywhere at this level.
This is my AUDNZD trade plan:
Buy Limit: 1.07
Stop Loss: 1.066
Take profit: 1.10
Let me know what you think.