It can be nicely seen on our first instrument: AUDCHF, where the price is drawing a beautiful hammer on the daily chart. This long tail, shows us a rapid strengthening of the CHF, followed by a fast reversal. In overall, the situation is negative. Few days ago, AUDCHF broke the lower line of the symmetric triangle pattern along with the horizontal support on the 0.669. Price closing below the orange support gave us a significant sell signal. Today’s hammer is really not changing much here.
I will continue with the AUD and show You an interesting setup on the AUDNZD. Here, yesterday, the sharp drop gave us a long-term sell signal. The pair broker the lower line of the descending triangle pattern and the lower line of a channel up formation. According to the all books about the technical analysis – that is a very negative situation promoting a further drop.
Two above setups show us a weakness of the AUD and the latest – additional strength of the NZD. Kiwi’s power can be confirmed by the situation on the EURNZD, where we do have a very handsome reversal. I must admit that this setup is really classic. We do have a bullish correction, ending on the down trendline, 23,6% Fibo and the horizontal support on the 1.68. In addition to that, the price draws a long head. Really it rarely gets much better than this. The pair is dropping quite significantly and there are big chances that we are going to witness new mid-term lows soon.
This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory
This article was originally posted on FX Empire
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