AUDNZD has completed a large complex top after the removal of 1.2372/17 support. We envisage decline back to the 1.1853 61.8% retracement.
AUDNZD has completed a major long-term topping structure that has been unfolding since the high of 1.3350 back in February 2011. The recent removal of 1.2372/17 support completes the complex pattern, and allows the decline to gather more downside momentum. Immediate support lies at 1.2225, however, we envisage a continuation through here to the 1.1933/1.1853 chart/61.8% retracement support zone. We also highlight that there exists overshoot risk through here to the 78.6% Fibonacci retracement support level – in fact, this latter level more appropriately coincides with the target objective from the long-term topping structure. Only back above 1.2555 neutralises the downside threat, with a breakout above 1.2801/35 required to negate the medium-term upward trend.
Trade Strategy: Sell at 1.2400, add at 1.2470, targeting 1.1900, stop at 1.2660.
Credit Suisse