Note: This analysis was first sent on December 19 to our subsribers of the Free Profitable Forex Newsletter.
Thin Trading In Fx As Holidays Mood Kicks In
It seems that the Christmas mood is already kicking in, and movements in the Forex market are small and confined to ranges on most pairs this week (ok except for GBP, but that’s another story). Not that we are not used to such low volatility this whole year, but opportunities can be scarce in such an environment, and technical patterns/levels may not work as expected.
Although several currency pairs have reached interesting technical levels and would be potential trading opportunities in normal conditions, it’s fairly possible that these patterns/levels won’t work as usual over the next few weeks around the Christmas and New Year’s holidays.
Long-Term Technical Analysis Of AUDUSD & NZDUSD; Pairs At Key Technical Levels
Therefore, again we are not recommending any specific trade idea, and we’ll stay away from trading over the next few weeks.
In the meantime, I decided to share this long-term technical analysis of the AUDUSD and NZDUSD currency pairs below, since we don’t analyze those pairs in our weekly analysis articles on a regular basis. Both have reached key resistance areas and are shaping important patterns.
Also, stay tuned for our yearly 2020 Forex analysis, which will be published at the beginning of the new year.
So, let’s now get into AUDUSD and NZDUSD long-term technicals.
AUDUSD Weekly Timeframe
The AUDUSD pair is in a downtrend for almost 2 straight years.
What started as a steep decline in January 2018 continued as a more gradual downtrend over the course of 2019. We can see this clearly on the weekly chart where AUDUSD is trading in a well-defined bearish channel for the past 12 - 13 months.
In addition to the strong resistance areas described above, the most recent rally looks like a consolidation/retracement technical pattern. Thus, downside continuation certainly seems possible. If that occurs, then AUDUSD can break below the 0.6600 lows next year.
However, if AUDUSD breaks the channel higher and through the Harmonic Gartley Resistance, then that would be a very bullish scenario. In such a case, AUDUSD may recover toward the 0.74 - 0.75 area.
NZDUSD Weekly Timeframe
The situation on the NZDUSD pair is not much different from AUDUSD, unsurprisingly, as those two pairs move in tandem usually.
NZDUSD also peaked out in January 2018 and has been in a relatively stable decline since then, although not as steady as AUDUSD. A bearish channel is also evident here for the past 12 - 13 months.
If the resistance here works and NZDUSD starts another bearish leg in the new year, then taking out the September 0.62 lows would be a possibility here also. In such a scenario, NZDUSD can fall toward the 0.60 area.
On the other hand, if NZDUSD breaks through both the Weekly Resistance Trendline and the Harmonic Bat Resistance, then the pair can rise toward the 0.70 area and higher.
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