The AUDNZD is trying to recover from a big sell-off which took this currency pair from its resistance area visible in light grey in the above H4 chart down to its support area marked in light blue. This currency pair shows signs of stabilization as all three bands of the Bollinger Band indicator started to move sideways; the upper band is located above the support area, the middle band inside of it and the lower band below it.
Price action already broke out above its support area as well as above the middle Bollinger Band which is expected to invite forex traders to realize floating trading profits by closing existing short positions. This will lead to a short-covering rally from where the AUDNZD will be able to enter a full reversal rally until it will reach its resistance area once again. A breakout above its latest intra-day high will add more strength to the rally.
Forex traders are recommended to enter long positions at 1.0635 and below this level in order to take advantage from the expected short-covering rally. Conservative forex traders already received a buy signal with the breakout above the middle band of it Bollinger Band indicator . A take profit target of 1.1035 has been set for a potential trading profit of 400pips on the H4 Chart. More buy orders are expected after the GBPUSD completes its breakout above its latest intra-day high.
Forex traders should protect this trade with a stop loss level at 1.0500 for a potential trading loss of 135 pips which will result in a Risk-Reward (RR) ratio of 2.96.
Long @ 1.0635
TP @ 1.1035
SL @ 1.0500