AUD/NZD 1D Chart: Double Top

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Despite the confidence with which the technical studies were showing ‘buy' signals, AUD/NZD broke through the lower boundary of the channel we discussed a week earlier. The currency pair is now forming a double top pattern, and there is a high probability the Aussie will keep ceding ground. A close below the Jul 9 low at 1.1020 will confirm the negative bias, and a 400-pip decline should follow. The sell-off is expected to start losing steam while closing in on 1.06, where the May 28 low merges with the long-term moving average. As for the sentiment, the traders seem to be undecided with respect to the future of the pair, as 47% of positions are long and 53% are short.
© Dukascopy Bank SA
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