- The bulls are waiting patiently for a weekly wave 3 to target the 1.11 handle.
- There is resistance on the 4HR chart which first needs to be penetrated and retested as support.
The price of AUD/NZD has been a compelling market structure since making a bullish wick on the monthly chart, often mistaken for a bearish candlestick pattern.
In fact, the wick represents a weekly correction which would ultimately lead to a wave 3 bullish extension.
The conditions would need to be met to see the bulls get on board withing the bullish environment beyond a current resistance structure on the 4-hour time frame.
The following is a top-down analysis to illustrate the theory of filling the wick and where a long swing trade setup might take place on a break of 4-hour structure:
Monthly chart
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The monthly chart offers a wick that could well be filled in considering the price action on the lower time frames as follows:
Weekly chart
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The weekly chart offers the prospects for a new impulse to the upside that will fill in the monthly wick and exceed the monthly highs to the 1.11 handle.
From a weekly wave perspective, wave 3 may already have commenced:
-637352077357930751.png)
However, there is resistance here:
-637352077846057899.png)
On the daily chart, a 61.8% Fibonacci reinforces the risk of chasing the bid at this juncture:
-637352078208717140.png)
From a 4-hour perspective, a 1.0970 target forecast from the -0.27 Fib extension of the daily correction comes in below the double bottom lows.
This likely means that there can be little hope of a downside extension.
-637352078556218966.png)
4HR confirmations
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Meanwhile, the price has already retested support structure and in the above chart’s location of the trendline is above it with a restest which is also bullish.
However, bulls need to get above the overhead resistance and there is where the price action should now be monitored from for extra confirmation.
A break and re-test of the structure, that will have turned support, will be satisfactory for entry to target the weekly resistance structure again and onwards to the overall 1.11 forecast.
