This Aussie pair seems to be in correction mode, as price is closing in on the Fibonacci retracement levels and descending trend line.
Is the long-term trend still our friend on this one?
Take a look at these inflection points on the 4-hour time frame:
AUD/NZD 4-hour Forex Chart by TradingView
Rumors that the U.S. and China are working on de-escalating trade tensions appear to be propping the Australian dollar up lately.
However, China has just clarified that President Xi and Trump have not yet had any direct communication, which means that it’s still possible for tariffs tensions to flare again.
Meanwhile, the Kiwi could regain some support thanks to a bit of distance from the U.S.-China trade spat, as well as a rebound in its dairy sector.
Are we about to see AUD/NZD resume its downtrend soon?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Australian and New Zealand dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The pair is already closing in on the 38.2% Fibonacci retracement level near R2 (1.0800) and a major psychological level, which could attract selling interest enough to put AUD/NZD back in selloff mode.
Keep an eye out for a larger pullback to the 50% Fib which lines up with R3 (1.0860) or all the way up to the 61.8% level closer to the long-term descending trend line resistance.
If any of these are able to keep gains in check, look out for a continuation of the slump to the swing low near S1 (1.0670) or lower. On the other hand, a break above the trend line close to the 1.0900 mark could suggest that major reversal is in the works.
As always, watch out for other top-tier catalysts that could impact overall market sentiment, and make sure you practice proper position sizing when taking any trades!
