FXStreet (Delhi) – Research Team at Societe Generale, suggests that there is accrued evidence of base formation above the 30Y support zone of 1.04/1.00; once confirmed, expect a recovery spanning over a couple of years towards 1.19 and 1.2350.
Key Quotes
“Having undergone a 4Y downtrend, AUD/NZD appears to have found a pivotal bottom at parity earlier this year. The pair has since tested the confluence of a nearly horizontal channel that has spanned for more than 30 years and a descending channel limit.”
“The pair is forming a probable inverted head and shoulders pattern at the aforementioned levels. This pattern normally suggests trend reversal to the upside. It is worth noting that the pair witnessed a similar downtrend in the 1990s (in a descending channel in wave A) but then reversal signs were not as vivid as is the case now.”
“Monthly indicators have diverged positively, highlighting a higher probability of a breakout. When a move above 1.1450 happens, this will confirm the formation and indicate an extended recovery towards 1.19 and probably even towards the 2011 lows of 1.2350. This upward move is expected to span for a couple of years.”
(Market News Provided by FXstreet)