AUD/NZD at key 1.0730 support, break may re-activate downtrend

FXStreet (Bali) - The The AUD/NZD has come into contact with a key area of support at 1.0730 after a poor Q4 Capex read in Australia.

The pair, which had been trading on a constructive undertone since finding a bottom at 1.05 on Jan 22, failed to break above 1.09 resistance in multiple occasions, leading to the ongoing sharp retreat that threatens to re-start the bearish trend should 1.0720/30 give up.

The current technical pattern in AUD/NZD daily chart is of a possible inverse head and shoulder, however, it is currently at risk of being invalidated upon a break lower of 1.0720/30, which would potentiallyy expose the trend lows in coming weeks. On the upside, the AUD still hangs on to hopes of holding support to extend the 1.0730/1.09 range.