AUD/NZD is ready to complete its third week of gains, having strongly rebounded from an eight-month low of 1.0261 early this month and breached its simple moving averages (SMA).
Encouragingly, the pair also managed to close on top of the Ichimoku cloud on Wednesday, while in momentum indicators, the rising MACD and RSI are embracing a positive bias for the short-term. The latter, however, is nearing its 70 overbought level, signaling that room for further improvement may be limited.
The 78.6% Fibonacci of 1.0629 of the 1.0729-1.0261 bearish wave could act as immediate resistance to upside movements ahead of the 1.0665 level. Another leg up would likely challenge the 2019 peak of 1.0729, a break of which could push resistance towards the 1.0800 level.
In case of a downside correction, the 61.8% Fibonacci of 1.0550 could be tested, while a drop below the 200-day SMA and the 50% Fibonacci of 1.0493 could add more pressure to the market, shifting attention towards the 38.2% Fibonacci of 1.0440 and then down to the 23.6% Fibonacci of 1.0372.
Meanwhile, in the medium-term picture, the market is in a range within the 1.029-1.0261 zone. Should the 50-day SMA distant itself further below the 200-day SMA, hopes for a bullish outlook will fade.
Summarising, AUD/NZD is looking bullish in the short-term and neutral in the medium-term.
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