- AUD/NZD is trading in a narrow range, finds strong support at 1.0787 (nearly converged 55 and 110-EMA).
- The pair has paused downside, but bearish divergence on Stochs keeps scope for further weakness.
- A better-than-expected China producer price index (PPI) on Saturday is keeping sentiment buoyed around the antipodeans.
- Australian markets remain closed on Monday on account of Queen's Birthday, to see limited volumes for the pair.
- Technical indicators are turning bearish. Stochs are biased lower and RSI has slipped below 50 levels.
- Break below major support at 1.0787 will see further weakness. Scope then for test of 61.8% Fib at 1.0668.
- On the flipside, 21-EMA is immediate resistance at 1.0836. Close above will see resumption of upside.
Support levels - 1.0787 (nearly converged 55 and 110-EMA), 1.0724 (50% Fib), 1.07, 1.0668 (61.8% Fib)
Resistance levels - 1.0836 (21-EMA), 1.0839 (5-DMA), 1.0849 (23.6% Fib)
Recommendation: Good to go short on break below 1.0785, SL: 1.0840, TP: 1.0725/ 1.07/ 1.0670
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -123.748 (Bearish), while Hourly NZD Spot Index was at 125.813 (Bullish) at 0630 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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