AUD/NZD Daily outlook – 01 December
Wednesday saw an eventful European and US trading session with the pair completing a Hikkake pattern rejecting strong upper resistance sitting at the 1.3180-1.3200 area. Since mid September we’ve seen the bulls well in control of this market; however trading since late October has been flat with much sideways chop providing few price action trading opportunities.
The Hikkake pattern can clearly be seen in the chart below. The 3 bar pattern is comprised of 3 bearish pin bars suggesting the market is strongly resisting upper levels.
In the chart below we can see the strong area that the market has been finding resistance at. Early in the year the pair was supported by the 1.3175 area which later turned into resistance. We’re now again back up at this level and it is once again proving to be a relevant level in the market.
The resistance is further strengthened by a 61.8% Fibonacci retracement level. Taking the swing high and low from 2011 we can see the 61.8% Fib level sits just above our S/R level mentioned above. Wednesdays pin bar bounced almost perfectly off the Fib retracement. It’s also wise to take note of the most recent bounce and rejection of the 61.8 shown below.
With the strong resistance tied in with the 61.8% Fibonacci retracement level we would expect a pull back in the coming days. The 3 bar Hikkake that is comprised of bearish pin bars supports our short term bearish outlook for the pair. Initial targets will be at the 1.3 level. Should we see a break and close below this area we could expect to fall towards the 1.2880 area depending on momentum.