- eyes multi-year inflection slope- Interim support at yearly open
- Updatedtargets & invalidation levels
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Broader Technical Outlook: We’ve been tracking the ‘slope of influence’ in AUD/NZD originating off the 2014 low. Last month the pair made a false-break below parallel support, with the subsequent rally now approaching slope resistance. Note that this trendline converges on the 50% retracement of the 2016 range at 1.0785 into the close of the month and represents a key inflection point.
Notes: Heading into the start of the week the immediate focus is on the 1.0663-1.0771/86 range with the long-bias at risk while below key slope resistance discussed above. Look for a break of this range to offer guidance on our near-term directional bias. From trading standpoint, I would be looking to fade weakness into structural support near the January lows at 1.0539 with a breach higher eyeing subsequent topside objectives into the upper parallels.
A quarter of the daily average true range yields profit targets of 19-23 pips per scalp. Added caution is warranted heading into key data prints this week with New Zealand 3Q CPI & RBA minutes on tap tonight. Continue tracking this setup and more throughout the week- Subscribe to and take advantage of the DailyFX New Subscriber Discount.
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—Written by Michael Boutros, Currency Strategist with DailyFX
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