From around the beginning of April, AUD/NZD has been moving sideways within a wide range between the 1.0545 and 1.0731 levels. But lately, the pair was spotted ranging within a much tighter area, between roughly the 1.0594 and 1.0615 hurdles. For now, we will remain neutral and wait for the rate to exit the narrower range first, before getting comfortable with a further short-term directional move.
If AUD/NZD breaks below the lower side of the small range, at 1.0594, this could invite more sellers back into the game and lead the rate towards the 200 EMA on the 4-hour chart. This is where the pair could hit the 1.0570 obstacle as well, marked near the lows of May 1st and 7th. We might see AUD/NZD getting held there initially, but if the bears are still feeling strong, a break of that obstacle might bring the pair to the lower side of the previously mentioned wide range, at 1.0545.
Looking at our oscillators, the RSI and the MACD are in support of the above-discussed idea, as both seem to be pointing slightly to the downside. The RSI is now below 50 and the MACD dropped fractionally below zero, and its trigger line.
Alternatively, a break above the upper side of the narrow range, at 1.0615, could spook the bears from the field and allow more bulls to join in. Such a move may lead the pair towards the 1.0645 hurdle, which marks the highs of April 24th and May 7th. If the buying doesn’t end there, a further rate acceleration could drive the pair to the 1.0685 barrier, marked by the intraday swing high of May 8th.
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