- AUD/NZD consolidates losses after refreshing one-week low, stays below previous key supports.
- 100-DMA, two-week-old rising trend line restrict recovery moves ahead of descending trend line from March.
- 23.6% Fibonacci retracement lures bears, for now, September’s bottom is a crucial support.
AUD/NZD licks its wounds around 1.0450-45 as Asia-Pacific traders brace for Australia’s Q3 GDP during early Wednesday morning.
That said, the cross-currency pair closed below the 100-DMA for the first time in a week while also breaking an ascending support line from November 18.
Given the steady RSI, coupled with a clear downside break of the previous key supports, the latest decline is likely to extend should the Australia GDP offer no major positive surprise, expected -2.7% versus prior +0.7% QoQ.
Read: Australian GDP Preview: September quarter contraction only a ‘setback’?
With this in mind, AUD/NZD traders aim for the 23.6% Fibonacci retracement (Fibo.) level of the March-November fall, around 1.0405, before attacking the 1.0400 threshold.
In a case where the quote remains bearish past-1.0400, 1.0330 and September’s bottom of 1.0278 will be crucial levels to watch before expecting a fresh low under 1.0240.
Meanwhile, the corrective pullback will aim for the support-turned-resistance levels of 1.0450 and 1.0480, comprising 100-DMA and a fortnight-long trend line.
Should AUD/NZD prices manage to stay firmer above 1.0480, the 38.2% Fibo. level of 1.0510 and a descending resistance line from March, at 1.0526 at the latest, will be critical for the bulls.
To sum up, AUD/NZD has already opened doors for the sellers ahead of the likely downbeat Aussie data.
AUD/NZD: Daily chart
Trend: Further weakness expected