Forex: AUD/NZD completes “bear flag” pattern, further downside coming?

FXstreet.com (Barcelona) - The AUD/NZD closed the NY sessions slightly lower, down 22 pips at 1.2202. The pair had traded as low as 1.2175 at one point during the day, before finding support and edging just off the lows late in the session. Over the last week, the pair has been consolidating in narrow range between 1.2200 and 1.2260.

“AUD/USD was understandably weak given lower equities and commodities, falling from 1.0360/70 late Asia to a NY low of 1.0277, its lowest print since 12 March. Further losses seem likely near term, with support at 1.0260 to be tested today. NZD/USD touched 0.8490 then chopped down to 0.8430/40. AUD/NZD extended its month-long slide to a 1.2177 low then back to 1.2200/05,” noted Sean Callow of Westpac Global Strategy Group.

From a technical perspective, the pair looks to have completed a short term “bear flag pattern” which has a measured move target of apx 1.2000. Short term moving averages on the daily chart remain in bearish set up, with price below both the downward sloping 9 day and 20 day moving averages.