- AUD/NZD breaks above 20-DMA, opens with a bullish gap up on the day.
- However, the pair failed to hold on to gains, slips lower from 4-week high at 1.1013.
- Aussie under pressure from weak China Caixin/Markit September services PMI which printed at a 21-month low of 50.6.
- That said, election-related uncertainty in New Zealand is likely to persist and weigh on kiwi until the composition of the government is announced.
- Technical studies are not conclusive, ADX does not support uptrend.
- Daily cloud offers strong support on the downside, break below will accentuate weakness.
Support levels - 1.0954 (5-DMA), 1.0935 (20-DMA), 1.0912 (50-DMA), 1.0848 (38.2% Fib retrace of 1.03706 to 1.11437 rally)
Resistance levels - 1.10188 (Mar 16 high), 1.11, 1.1130 (trendline)
Recommendation: We prefer to wait for clear directional bias.
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