Strategy 29 January 2014

AUD/NZD – Daily Chart

A technical buy signal has been seen on AUD/NZD and a major reversal higher should follow

AUD/NZD probed and then bounced off the 1.0501/1.0434 major support zone which consists of the 1995 and 2005 lows. A major reversal higher should now be seen.
We recommend buying AUD/NZD in the 1.0600 region with a stop at 1.0400 and an upside target at 1.1150.
Because of the positive RSI divergence and because AUD/NZD bounced off the psychological 1.0500 level we are of the opinion that another significant low was made at 1.0493. This is why we have changed our technical view from a neutral to a bullish one. We will retain our bullish outlook while no daily close below the 1.0400 level is being made. If so, allow for parity to be targeted.
Upside targets are the 1.0707/31 area (December low and January 20 high) and then the 1.0911/28 region (55 day moving average and late December high. Once the latter has been bettered, the August and September lows at 1.1157/99 will be back in the picture.
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