Aussie Dollar Weakness
The Australian dollar has really struggled against the New Zealand dollar in recent months. Back in January I posted about the long-term weakness of this particular pair, and pointed out that it was in a strong downward trend on pretty much every single time frame, including the monthly, weekly, daily and 4-hour time frame.
Well nothing much has changed because if you look at exactly the same time frames on a single screen, it is clear that this pair is still in a very strong downward trend.
The price is actually lower now than it was in my previous post, which indicates that the long-term downward trend is still in place, and if you look at the price in comparison to the 20, 50, 100 and 200-day moving averages, you can see that it is still below all of these indicators on the monthly, weekly, daily and 4-hour chart:
Future Price Direction
The AUD/NZD is still not really showing any signs of strength or recovery, and has actually just started to turn downwards once again on the lower time frames, ie the daily and 4-hour chart, which is why I thought it was worth mentioning it in a new blog post.
At the time of writing, the price has moved back towards the EMA (20) on the daily chart, but has fallen back today, and has just crossed below the EMA (20) on the 4-hour chart.
Therefore the likelihood of a recovery in the short-term is looking less and less likely, and it is looking more likely that the price will continue falling.
It recently fell below 1.03 last week, and I think it could easily test this level once again, and possibly go a little lower before we see any potential recovery.
Long-Term Prediction
You would have to think that the long-term weakness in the AUD/NZD cannot continue forever. At some point the Aussie dollar should start to strengthen against the New Zealand dollar.
Looking at the monthly and weekly charts, it wouldn’t be at all surprising to see the price move back towards the 100 and 200-period moving averages at around 1.07-1.08 in the medium-term, and up to 1.11 looking further ahead.
However as I always say, these are just my own thoughts and opinions, and this is no way should be seen as professional trading or financial advice. You should always do your own research and make your own decisions when trading the forex markets.
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