FxWirePro: AUD/NZD finds strong support at 1.1072, good to go short on break below

• AUD/NZD capped below major trendline resistance at 1.1145, hammer formation seen on daily charts.
   
• The pair has broken below 20-SMA on the hourly charts and downside now finds major support at 1.1072 (converged trendline and 1H 200-SMA).
   
• Break below will see extension of weakness. Scope then for test of 1.0975 (20-DMA).
   
• Kiwi was depressed after downward revision of the New Zealand Institute of Economic Research (NZIER) inflation forecasts.
   
• NZIER revised its 2017/18 inflation forecasts to 1.1% (previous 1.5%), while growth forecast was revised to 2.9% (previous 3.1%).
   
• The inflation is seen rising 1.9% in 2018/19 as opposed to the previous forecast of 2%, while the growth forecast has been revised higher to 3.4% from 3.1%.
   
• We see upside only on break above major trendline resistance at 1.1145. Next major resistance above 1.1155 lies at 1.1173 (78.6% Fib retrace of 1.1429 to 1.0237 fall).

Support levels - 1.1072 (1H 200-SMA), 1.1018 (weekly 5-SMA), 1.0975 (nearly converged 20-DMA and 61.8% Fib of 1.4129 to 1.0237 fall)

Resistance levels - 1.11 (1H 20-SMA), , 1.1145 (trendline), 1.1175 (78.6% Fib retrace of 1.1429 to 1.0237 fall), 1.12

Recommendation: Good to go short on break below 1H 20-SMA, SL: 1.1150, TP: 1.1020/ 1.0975/ 1.0930.

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