AUD/USD validating bearish pattern, NZD/USD poised to do same
AUD/USD snapped a corrective price pattern, looking towards June and January lows in the coming days and weeks, with NZD/USD set to follow.
AUD/USD and NZD/USD technical highlights:
- AUD/USD validated corrective rising wedge
- Looking for June, January lows on further weakness
- NZD/USD to follow with its own breakdown
AUD/USD validated corrective rising wedge
AUD/USD has come off with a fair amount of vigour in the last few sessions, as the US dollar is finding bids across the board. The drop late last week snapped the underside trendline of a corrective wedge formed over the past few weeks.
Pattern validation is not only within the context of a downtrend in place since January 2018, but also after the price tested a trendline from December and came very near the 200-day moving average (MA). The breakdown is carving out a lower low from July 10, further undermining Aussie’s technical backdrop.
There may be a bounce soon, but given the technical damage and general tone it is likely to be seen as short-lived. The next anticipated area where a meaningful low may potentially form, is the June 18 low at $0.6831. A move beyond last month’s low will have in focus the January flash-crash low at $0.6744.
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AUD/USD daily chart (validated rising wedge)
NZD/USD to follow with its own breakdown
Kiwi has held up a bit better than its sibling, Aussie, but as goes one typically goes the other, just to varying degrees of strength and weakness. If NZD/USD can solidly snap the underside trendline of its corrective pattern, then look for it to trade lower.
First up as support is the July 10 low at $0.6565, followed by the 2015 trendline and May/June lows, which are in near confluence. The $0.6500-$0.6480 area should be a big spot to watch for a bounce to develop if Kiwi trades to that point.
NZD/USD daily chart (looking to snap corrective pattern)
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