Actually, it was not the decision itself but the statement from the RBA. Market participants think that after this statement, the next movement should be hawkish and that is why they bought AUD. NZD also went higher driven mostly by the strong correlation between those two.
The technical part will start with the AUDNZD, where we can see a nice upswing. This does not happen in a random place and is present on an ultra-important horizontal support. The buy signal is ON but patient traders can wait for one confirmation – breakout of the yellow horizontal resistance. Once that will happen, the upswing should gain momentum.
Now the USDCHF. V shape reversal that started in the middle of January, entered the new stage. We are on a strong horizontal resistance and buyers will try to break it for the first time in February. It was already tested before in January and those tests resulted with the bearish reversals. That can be used as a good omen for the short-term sellers. We have to mention that this resistance is exactly on the parity, so psychological aspect plays an additional role here.
The last one is the EURNZD, which was mentioned on our website yesterday. Here, we do have a bounce from the mid-term down trendline and the breakout from the bullish flag. What is more, we do have a double top formation and both those bullish movements are false breakouts. All that together gives us a strong sell signal strengthened additionally by the hawkish RBA mentioned in the first paragraph.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis
This article was originally posted on FX Empire
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