Bank of America (BofA) has highlighted a recent pattern in the AUDNZD currency pair, noting that the bullish reversal week observed in the week ending July 21 could signal a favorable environment for those bullish on the pair.

Key Points:

1. Engulfing Pattern: The price action for the week ending July 21 saw the AUDNZD engulf the entire price range of the prior week. This indicates strong buying interest and can be a strong bullish signal, especially when observed after a downtrend or at significant support levels.

2. Historical Context: BofA pointed to historical patterns, suggesting that such engulfing weeks often precede upside moves in AUDNZD. The bank's analysis included green arrows on a provided chart to indicate past occurrences of this pattern.

3. Exceptions Noted: The analysis also acknowledged two near-miss engulfing patterns, marked with black arrows. Though these two instances didn't fit the engulfing pattern definition perfectly due to minor discrepancies, they still resemble the overall bullish sentiment.

4. Support from 200-week SMA: The price action was also supported by the 200-week Simple Moving Average (SMA), a technical indicator that smooths out price data to create a single flowing line, making it easier to identify the direction of the trend.

5. Short-term Forecast: Based on this pattern, BofA anticipates that AUDNZD could rally back to the Year-To-Date (YTD) highs, targeting approximately 1.1050.

6. Longer-term Potential: There might also be potential for a breakout, with BofA targeting a rally to the low 1.12s for the AUDNZD.

Summary:

Bank of America's technical analysis suggests a bullish outlook for the AUDNZD currency pair in the near to medium term. The recent bullish reversal week, combined with historical patterns and technical indicators, provides a strong case for potential upside in the coming weeks. Traders and investors are advised to watch the pair closely for signs of continuation or potential resistance levels.