Forex Market: AUD/NZD trading outlook for December 14th

Friday’s trade saw AUD/NZD within the range of 1.0697-1.0776. The pair closed at 1.0713, losing 0.63% on a daily basis. It has been the seventh drop in the past ten trading days. The daily low was a lower-low test of the low from December 10th. In weekly terms, AUD/NZD plunged 1.53% during the current week, or the most since the week ended on October 18th, when it depreciated 2.75%. It has been a third consecutive week of losses. AUD/NZD has fallen 2.41% so far during the current month.

No relevant macroeconomic reports and other events, which may influence AUD/NZD trading, are scheduled for release on Monday (December 14th).

AUD/NZD may see further downside, as the four Exponential Moving Averages are set to form a perfect order, with the 21-day EMA (yellow) being at the bottom and the 200-day EMA (white) being on top. In addition, bearish momentum has gradually increased, after the MACD generated a strong bearish signal on December 3rd (the MACD main line crossed the signal line in a top-down manner). Last but not least, the 14-period Relative Strength Index has moved below its 50.00 level and still has some room to run before indicating oversold conditions.

Correlation with Major Currency Pairs

Taking into account the week ended on December 13th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

AUD/NZD to USD/CHF (0.9835, or very strong)
AUD/NZD to USD/JPY (0.9826, or very strong)
AUD/NZD to AUD/USD (0.5054, or strong)
AUD/NZD to NZD/USD (-0.7955, or strong)
AUD/NZD to USD/CAD (-0.8491, or very strong)
AUD/NZD to GBP/USD (-0.8707, or very strong)
AUD/NZD to EUR/USD (-0.9309, or very strong)

1. During the examined period AUD/NZD moved strongly in one and the same direction with AUD/USD, while moving strongly in the opposite direction compared to NZD/USD.

2. AUD/NZD moved almost equally in one and the same direction with USD/CHF and USD/JPY during the week, while moving almost equally in the opposite direction compared to USD/CAD, GBP/USD and EUR/USD. This relationship has been the most pronounced between AUD/NZD and EUR/USD.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for AUD/NZD are presented as follows:

Central Pivot Point – 1.0729
R1 – 1.0760
R2 – 1.0808
R3 – 1.0839

S1 – 1.0681
S2 – 1.0650
S3 – 1.0602

By using the traditional method of calculation again, the weekly pivot levels for AUD/NZD are presented as follows:

Central Pivot Point – 1.0790
R1 – 1.0884
R2 – 1.1056
R3 – 1.1150

S1 – 1.0618
S2 – 1.0524
S3 – 1.0352