- AUD/NZD was rejected at stiff resistance at daily cloud base at 1.0725 on Thursday's trade.
- The pair is trading in a narrow range making a day's high of 1.0705 and a low of 1.0680.
- We see strong support at 1.0682 (converged 5-DMA and 55-EMA), break below will see further weakness.
- Antipodeans depressed by weak China Industrial Profits data which increased by only 3.1% Y/Y, compared to the previous reading of 10.8%.
- We evidence formation of a Gravestone Doji at highs which raises scope for downside.
- Stochs are also at overbought levels which raises need for caution. We see further upside only on break above daily cloud.
- Break above cloud base finds next major resistance at 1.0758 (110-EMA) ahead of 38.2% Fib at 1.0794.
- On the downside, retrace below 5-DMA at 1.0682 to see minor weakness. Bullish invalidation only on break below 20-DMA.
Support levels - 1.0682 (converged 5-DMA & 55-EMA), 1.0599 (20-DMA), 1.05
Resistance levels - 1.0757 (converged 110-EMA & 200W SMA), 1.0783 (20W SMA), 1.0794 (38.2% Fib)
Recommendation: Watch out for break below 55-EMA for further weakness.
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