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Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Technical Update - AUD pairs: AUDUSD, EURAUD, AUDJPY & AUDNZD
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: AUDUSD looking at resistance at 0.7152
EURAUD range bound and needs to break out for direction
AUDJPY under pressure close to test 87.30 support. Shoulder-Head-Shoulder pattern could unfold
AUDNZD forming rising wedge approaching 1.10 resistance
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AUDUSD has continue higher after moving above its 200 daily SMA and seems to be forming a wedge like pattern.
AUDUSD pair seems to be set for a move to key resistance at around 0.7125.
But that resistance could be a hard nut to crack. Medium-term falling trendline (see weekly chart) will provide resistance and 200 and 100 weekly SMA’s are adding to that resistance. If rejected AUDUSD could slide back to test the lower rising trend line in the possible wedge. If closing below the lower rising trendline a move to test key support at around 0.6630 could be seen
EURAUD seems to be in a bit of a limbo jumping around its 55 daily SMA. A close above 1.5620 is required for a move back towards December peak just below 1.60 whereas a close below 1.5415 would see EURAUD to test key support at around 1.5265. If EURAUD closes below that level another sell-off down to around 1.50 i.e., dipping below the 200 SMA.
AUDJPY is under pressure and could test the key support area 87.90-87.30. If RSI closes below its lower rising trendline there is a great likelihood for this scenario to play out. On weekly chart we can see how AUDJPY has formed a complex Shoulder-Head-Shoulder like pattern with potential down to 81-80. That very bearish picture will emerge if AUDJPY closes below the neckline.
If AUDJPY manages to close above 91.85 a move to around 92.50 could be seen but for AUDJPY to reverse the bearish trend a close above 93.35 is needed
If AUDJPY manages to close above 91.85 a move to around 92.50 could be seen but for AUDJPY to reverse the bearish trend a close above 93.35 is needed
AUDNZD is trading in a rising wedge/channel like pattern approaching 0.50 retracement of the September- November downtrend and the strong resistance at around 1.10. The 100 SMA will provide some resistance too.
RSI is above 60 i.e., showing positive sentiment with no divergence supporting the bullish move. However, if sellers manage to push the pair below the lower rising trendline the key support at around 1.0785 could be tested. A close below that level is likely to reverse the uptrend in AUDNZD.
An uptrend that can potentially take the pair to the 0.618 retracement around 1.1095.
RSI divergence: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend
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