Around early August I posted this video on AUDNZD where I outlined the longer term view of the inverse head and shoulders pattern based off the Renko charts. Its been close to two months since then and price action has barely made any significant moves so far having been caught within a tight range.
Revisiting the 100 Pip fixed box Renko chart, we can see that price action has been ranging sideways, trading within 1.1298 and 1.0998 region of support and resistance after prices failed to break above the main level of resistance at 1.1298 and 1.1198. The ranging price action here points to a possible break out in the near term with the downside target to 1.0698 being a possibility.
On the50 Pip Renko chart for AUDNZD, the ranging price action is a bit more evident as the support near 1.09848 has proven to be a strong support level that has led to a bounce in prices in nearly three attempts to far. As of Friday’s close, AUDNZD 50 pip chart looks poised for another test to the 1.09848 leve. A potential breakdown of prices below this support could see AUDNZD decline lower to test the next main support at 1.0748 followed by the main level of interest which is 1.0648 – 1.0598.
On the 50 Pip AUDNZD chart, there is also a possibility that in the event prices are supported at 1.0948, the upside bounce could potentially see a head and shoulders pattern being formed, if we get to see a lower high being created at 1.1198 or lower. This would validate a measured move to the downside right into 1.0648 level of support.
Placing pending long orders within the region of 1.0648 – 1.0598 region is definitely the play, targeting 1.1198 and eventually to 1.1298 on break above the initial resistance of 1.1198 in the short term, traders can look to the possibility of a break below 1.0948 region of support in order to target the lower supports at 1.0748 and eventually to 1.0648 region.