This was a strong week for the AUD. As it goes, I also see the AUD emerging as one of the strongest currencies post-Covid. Nonetheless, I do expect this head and shoulders pattern to hold firm here indicating we should be shorting it against the NZD. Price has been up trending since mid-March but the chart pattern shows a reticence to go higher and also some long wicks to the upside affirming this - hence a head and shoulder pattern has formed over the last few weeks which I expect to be obeyed by the market.
I have highlighted the route I expect the pair to take, clearly moving down towards the left-shoulder completion, the 200EMA and the neckline. This pair does have a recent historical precedent which I have highlighted in October where an inverse head and shoulder pattern played out as I expect this to with a clear bias to the neckline. I wanted to short this pair today but didn't given the bank holiday (damn!) but still think there's lots of scope for downside continuation here and a reversal of the uptrend (we have also broken the key trend line on the H4 chart).
My analysis last week was decent and here's to hoping for a similar start to the new trading week!
I have highlighted the route I expect the pair to take, clearly moving down towards the left-shoulder completion, the 200EMA and the neckline. This pair does have a recent historical precedent which I have highlighted in October where an inverse head and shoulder pattern played out as I expect this to with a clear bias to the neckline. I wanted to short this pair today but didn't given the bank holiday (damn!) but still think there's lots of scope for downside continuation here and a reversal of the uptrend (we have also broken the key trend line on the H4 chart).
My analysis last week was decent and here's to hoping for a similar start to the new trading week!