FxWirePro: AUD/NZD forms hammer after dragonfly doji, more likely to extend rallies, major downtrend remains intact – boundary binaries to speculate

AUDNZD more rallies seem to be on cards upon the bullish candlestick formations but the major trend remains intact at 21-EMA in sloping channel.

Dragonfly Doji is occurred at 1.0369 level that has evidenced upswings upto the resistance of 1.0530 levels, currently trading at 1.0461 levels.

For now, hammer candlestick is formed at 1.0445 levels which is again a bullish pattern.

On the daily chart, after three days of bearish pressures bulls taking support at 1.0455 levels and attempting to bounce with a formation of hammer pattern yesterday which is a bullish pattern, the current prices have gone well above 7-DMA again and a potential for more price upswings are foreseen for now.

Prior to this, gravestone doji evidences price dips that have gone below 7DMAs, although day trend seems to be bullish but likely to be restrained below 21DMA.

Well, considering the broader picture, the downswings have been slipping through sloping channel, every price bounces were rejected at channel resistance and every dips were supported at baseline.

Bulls unlikely to break resistances of 1.0493 & 21EMA, instead, expect more slumps on bearish EMA crossover, momentum indicators to substantiate

The current prices have remained well below EMAs, while MACD evidences bearish crossover below zero level, so we foresee bearish swings to be prolonged.

Both leading indicators (RSI & stochastic) on dailies have been little indecisive but are slightly bullish bias to signal buying sentiments in the short term and selling sentiments on monthly charts remains intact.

While stochastic curve at 20 levels which is oversold zone has been evidencing %K crossover on monthly but not a convincing bullish crossover.

FxWirePro currency strength index that measures the hourly performance of a basket of 10 currency peers shows that NZD has dipped from bullish 106 levels to the current 22 levels ahead of RBNZ monetary policy statement.

Well, having said that we wrap up with concluding note, short-term bulls can speculate this pair whereas long-term investors at current juncture contemplating above bearish indications. On intraday trading perspective, at spot reference 1.0465 we advocate buying boundary binaries on dips upper strikes at 1.0507 and lower strikes at 1.0425 which means upward travel maximum up to 40 pips and 40 pips on southward targets within the binary expiry duration.

Alternatively, writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position in mid-month contract.