AUD/NZD Facing a Dilemma at the Important 1.0546 Support

The Australian dollar versus the New Zealand dollar currency pair is caught in between the bullish and bearish plans, with both parties being of equal strength right now.

Long-term perspective
After confirming the 1.0292 support and ending the descending trend, the price got stuck between two important areas from which — actually — both serve as support: 1.0668 and 1.0546. The latter is an important weekly support, while the first plays the role of a resistance, even if it is — as already said — an important support from the weekly perspective.
At a closer analysis, the lack of direction is fueled by the following facts. First of all, after the rally from 1.0292 the price topped around 1.0725, a behavior that can be treated as a confirmation of 1.0668 as resistance, with the resulting bearish expectations to pierce 1.0546 and continue the downwards move. Secondly, it looks like the bearish expectations that came after the retracement from 1.0725 were countered by the bulls who looked for a support, which was found at 1.0546. So, the bears rely on the retreat from 1.0725, the confirmation of 1.0668, and the new addition of topping at 1.0631 on May 30, 2019, while the bulls consider all this arguments futile as the outcome — a strong drop with the break of 1.0546 — does not materialize because of 1.0546 guarding its role as a major support level.
So, as long as 1.0546 holds the price could confirm 1.0668 as support and head for 1.0866. In turn, if 1.0546 finally gives way, a revisit of 1.0452 is imminent.

Shot-term perspective
The price just ended the evolution of an angled rectangle. Being preceded by a descend and being a continuation pattern, it is expected that the move will continue to the south. The first target — 1.0542 — has been reached. If the price manages to continue from here, then 1.04877 is in reach, followed by 1.0452.
This continuation could come after a short-lived consolidative phase or could simply extend the current drop. However, if attempts to move even lower than 1.0542 fail, then the bullish scenarios discussed for the long-term come into play, the attention, in this case, turning to 1.0625 and later to 1.0672.

Levels to keep an eye on:
D1: 1.0546 1.0668 1.0452
H4: 1.0542 1.0487 1.0452 1.0625 1.0672

If you have any questions, comments, or opinions regarding the Technical Analysis, feel free to post them using the commentary form below.

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