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AUD/NZD in a Flag Breakout

In the short to medium-term, the AUD/NZD has been choppy in the past couple of months. When we look at price action since the 1.0879 low from late July, we see that the market was bullish. Part of his bullish push followed the RBA statement, which many thought was less dovish than previous ones.

AUD/NZD 4h Chart 8/13

(click to enlarge)

The 4H chart shows that after the reaction to the RBA statement, price came up to 1.1317 before stalling. It then has been forming a flag pattern. During the 8/12-8/13 sessions, price bounced off of the previous resistance area around 1.11. Now, it is cracking the flag pattern resistance and the 1.12 handle. IF price can close above 1.1220 it would be a clear break above the correction pattern and show that price now wants to hold above the cluster of 200-, 100-, and 50-period SMAs. This could be a sign of further strength beyond 1.1317. In fact, it could be an early sign of bullish continuation for the medium-term. 

AUD/NZD Daily Chart 8/13
(click to enlarge)

The daily chart shows that a bullish sign would have he 1.4288 high on the year in sight. This outlook would be going with the prevailing trend since April. Note that the RSI is holding above 40, and price is now above the 200-, 100-, and 50-day SMAs. These are signs that in the longer medium-term (outside of the previous 2 months), the bullish outlook is still intact. 

At this point the 1.1150 level might be a key pivot. I would see if price can hold above this level. IF not, I would be wary of further bearish correction in the short-term to build on its 2-month long consolidation/correction pattern seen int he daily chart. Then, perhaps we will find key support in the 1.07-1.108 area. But at that point, the resulting bullish outlook will likely be limited and less aggressive than the current outlook would be - reason being if price holds above 1.10, the bullish continuation breakout will appear more likely and therefore bulls might be more confident.