AUD,NZD/Technical Analysis

AUD/USD technicals: Getting set for a big break-out move

     I’ve been following the weekly wedge on this pair for the last few months and as we know in FX markets, the longer a pair stays tied in a tight range, the bigger the breakout move will be. Taking a quick look at the daily chart, we can see that the big 4 MAs (21, 55, 100 and 200) are all lying very close together. So we either get a few more months of really tight ranges or we get a big breakout; of course I hope for the latter. Market positioning data shows that the market is totally flat, another indicator that we may soon see a move starting to build.

My preferred scenario is that we initially see a false break lower, taking the market into the low 90’s again and everyone gets short and bearish, but then we see a sharp reversal in line with terrible USD fundamentals which will take AUD/USD towards 1.20 and beyond. Well you gotta have a plan!

  1. Not sure if the RBA allows your strategy to work. If there was a little chance of breakout it was on US elections day when all signs were that it crosses 1.05 but that was a false breakout. Now I fear that if 1.0350 goes this time it is headed for 1.0150.

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