Nothing much in the economic calendar but it looks like the Aussie is responding positively especially against the Kiwi. Remember the Aussie has been on the receiving against the Kiwi for the past few weeks and a recovery is expected as this currency bottoms out. Anyhow, the events calendar is dry when it comes to market moving events from these two countries.
The only thing that traders should be watching out is the ongoing development in New Zealand as the new government is constituted. GBP is depreciating across the board and the reason for his has been pointed out to political development in Ireland where Ireland’s deputy Prime minister is likely to be forced out through a no confidence vote.
On top of that there are issues relating to North Ireland and EU’s Ireland’s border concerns that might derail Brexit negotiation. Contention here is if there should be a hard border between the countries or not and the UK in particular is playing hard ball.
This in return is putting more pressure on the Pound now that Theresa May was given a “10-Day” deadline to submit improved terms when it come on matters Brexit and one of them is completely resolving the border issue.
Anyhow, I recommend trading the AUDNZD because of better entries.
As we note, despite the current bear trend, momentum is still bullish and that is why we look to enter long in short time frames.
In this case, the increasing bull momentum might lead to a retest of the main resistance trend line shown in the monthly chart.
In the 4HR chart, we can see these higher highs relative to the lower BB as price action bounces off from previous resistance now support line at 1.09.
Accompanying these higher highs is a stochastic buy signal turning from deep the oversold territory. Traders should watch two levels only.
The first one is previous support now resistance line at 1.10 and the minor resistance trend line. In case price breach the latter, it means bulls are in charge just like what the monthly chart is pointing to.
We therefore trade as follows:
Stop Loss: 1.095
Take Profit: Ideal at 1.11 and 1.12
Have a good trading day.