AUD/NZD has been bullish throughout August so far. The 1H chart below shows the rally from about 1.0440 to about 1.0740. AUD/NZD 1H Chart 8/9(click to enlarge)Double top:- We can see that price came up to 1.0740 twice and retreated.- The first time, price came down to 1.0682. Will price retreat back to this support level again?- If price comes back to 1.0682, it would show that price has neutralized and possibly topped.- A break below 1.0680 signals a bearish swing. Let's take a look at the daily chart:AUD/NZD Daily Chart 8/9(click to enlarge)Resistance, bearish outlook:- We can see that the 1.0740-1.0775 area is a common resistance area. - Also, we can see that the 200- and 100-day simple moving averages (SMAs) are in this area, maybe up to 1.0790. - Now, if there is a bearish swing, we should note that the has turned somewhat neutral after the March to July decline. - Thus the bearish targets should be limited to 1.0550-1.0570 and 1.05. The 1.0320 low might be a bit aggressive, but it would still be within the mode since 2015 - neutral/slightly bearish.Bullish scenario:- A break above 1.08 should open up 1.0875 and the .0970-1.10A trade consideration:- Let's say we short at 1.0730 with a stop at 1.0830 for a risk of 100 pips. - A target of 1.0570 (160 pips lower) offers a reward of risk 1.6 to 1. - A target of 1.05 (230 pips lower) offers a reward to risk of 2.3 to 1. - The average reward to risk is almost 2:1. A shorter-term trade consideration: - The above consideration is for the medium-term. Here's a very short-term one:- Entry at 1.0730 with stop at 1.0765. Risk: 35 pips- target 1: 1.0690. Reward: 40 pips. - target 2: 1.0600 Reward: 130 pips- the average reward to risk is slightly higher than 2 to 1. The shorter-term consideration offers better reward to risk. Also, it is more conservative and is a better plan if the prospect of AUD/NZD turning bullish in the medium-term is high.