National Australia Bank on the Australian dollar, chart (27 September):
Trend Price has traded in a broad triangle since the low of early 2016 that has neither confirmed nor rejected the multi-year downtrend. The July break above two-year range highs at 0.7835 and the 2016/2017 trend resistance at 0.7700/30 was the first piece of information in this period that has confirmed a decisive and sustainable MT uptrend bias. This comes off the back of June’s impulsive upswing and further justifies a continuing multi-month uptrend. These breakouts open up the topside with the next major resistance level at 0.8250/0.8350, this being a textbook projection of the July triangle breakout. Recent weeks have seen the uptrend pause however the uptrend structure remains firm while daily closes are above 0.7808. Bigger picture only a weekly close below 0.7700/30 would negate the MT uptrend bias.
MomentumLT momentum indicators remain positive and confirm an ongoing MT/LT uptrend bias. MT momentum has shifted to a negative bias in the recent weeks after testing overbought and historically unsustainable levels. This is typical in a corrective phase.
Outlook The positive outlook that we have identified in recent months remains in play. Additional bullish confirmation will be achieved with a monthly close above the 50-month MA at 0.8030. While weekly closes remain above 0.7700/30 we target a multi-week to multi-month uptrend towards 0.8250/0.8350. ST risks have increased however with poor price action amid a negative MT momentum shift. Relatively neutral ST bias.