The AUDNZD has been getting a lot attention from us price action traders during the last few months, dropping some really nice, clear-cut signals in the monster downtrend which we’ve been seeing. Recently the market has bounced of a strong, long-term monthly support level and dropped a large bearish rejection candle. The market is now looking like it’s heading back down, looking to retest those important monthly lows.
On Friday after the NFP release, the AUDNZD rejected a move higher into an old support level which responded as new resistance, a dictionary definition of a swing level pretty much. The market closed right on the lows of Friday’s trading, leaving no lower wick what so ever. A very bearish indicator.
This is such an obvious key level for a bearish signal to form. Multiple non-correlated variable are lining up to support a short position. The swing level, the mean value, the fact the market closed lower than its open price, and the high of the rejection candle made a lower high in the market. There isn’t really any more boxes we could tick here to support the trade. We will probably see lower prices develop next week with a possible retest of the monthly lows marked on the chart.