AUD- NZD Testing Yearly Highs

By: Mike Kulej

The Australian Dollar – New Zealand Dollar pair has been through a roller coaster ride this year. It had three major price swings over 1000 pips in magnitude. The bullish moves were capped at 1.3230 and currently the AUD-NZD is approaching this level again.

There is no doubt that the prevailing trend is up, even if it had a sharp correction lately. After making a high of 1.3220 (almost touching the annual extreme), the price pulled back to 1.2650, before the current rally started. However, a valid up trend line can still be drawn, confirming the general bullish direction.

This could change, though. On Thursday, the high was 1.3215, once again testing the yearly high, but the day closed significantly lower, creating a shooting star candlestick pattern, which is bearish in nature. One could expect another correction, since the resistance proves formidable.

Some technical indicators also suggest limited upside potential. The Stochastic indicator shows overbought value, pointing to a possible pull back. While the prevailing trend is still bullish, the AUD-NZD will likely have problems making a new high in the short term. 

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