Fan Yang
All posts from Fan Yang
Fan Yang in Fan Yang,

AUD/NZD Continues Bullish Reversal after AUS Jobs Data

The AUD/NZD recently made a sharp bullish reversal after falling from near 1.1345 to about 1.05.

AUD/NZD 4H Chart 11/12

(click to enlarge)

From 1.05 price popped up to almost 1.09 before falling into what is now clearly a flag pattern. During the formation of this flag pattern, I noted that there was support at and just above 1.07, where price indeed rebounded and is now continuing the bullish reversal scenario in the 4H chart. 

On top of the technical support above 1.07, the market also rebounded on the back of better-than-expected jobs data for October. 
Employment Change: (Oct.): 58.6K
Estimates: 14.8K
Previous: -0.8K (revised up from -5.1K)
Unemployment Rate (Oct.): 5.9%
Estimates: 6.1%
Previous: 6.1%

As you can see data was much better than expected, giving AUD at least a short-term boost. From the 4H chart, we can expected the rally to push towards the 1.0980-1.10 area, involving a previous resistance and the psychological level of 1.10.

Looking at a higher time-frame, we can consider the possibility that this short-term boost could gain momentum to continue a medium-term uptrend that started in April, as seen in the daily chart. 

AUD/NZD Daily Chart 11/12

(click to enlarge)

If price does breach 1.10, the 1.1345 high up to the high of the year around 1.1420 would come into play. Now, this would be a medium-term outlook that can take months. During this bullish scenario, we have to consider the downside risk back towards 1.08, and/or a period of sideways consolidation.