The AUDNZD buy position closed out at breakeven last week. This week we have the RBNZ interest rate decision and policy statement. Previously economic data has improved in NZ and many analysts are forecasting a more positive tone from the central bank. With that in mind, we see the possibility of NZD strength coming into play over the coming days and as the AUDNZD failed to breakout to the upside, there is a possibility of a deeper correction on the cards.
AUDNZD – 4 Hour Charts
AUDNZD – 1 Hour Charts
Based on Elliott wave theory, a triangle formation labelled a-b-c-d-e, can ONLY occur in a wave 4 or a wave b. Therefore we see this triangle formation as a B wave, which is part of a correction. Our targets can be found at 1.0540 – 1.0430
Trade Setup: SELL Market Execution, current price 1.0770, stop loss 1.0840 and take profit 1.0540.
Stop loss: 70 pips
Take profit: 230 pips