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Technical Analysis – NZD/USD

NZD/USD 22/02/2018 | EconAlerts

FXG-FEB-LC-IB-728x90-EN | EconAlerts

NZD/USD creates double top formation at 0.7435; bearish move is expected.

NZD/USD is trading lower over the last four days after it created a double top at the 5-month high of 0.7435 on February 16. The double top reversal is a bearish pattern indicating further losses on the price action. When looking at the bigger picture the pair lacks a clear trend since it has been consolidating within 0.7175 – 0.7435 after its rally from 0.6780 stalled at 0.7435.

In the 4-hour chart, momentum indicators are also pointing to a continuation of the bearish bias. The MACD oscillator is standing below the trigger line in the bullish zone, suggesting a further downward correction. Also, the stochastic oscillator is moving lower approaching the oversold zone after it posted a bearish cross within its moving averages.

If prices extend to the downside, immediate support could come from the 23.6% Fibonacci retracement level of 0.7270 of the up-leg from 0.6820 to 0.7435. Below that, the price could hit the 0.7175 support, which is the 38.2% Fibonacci mark. An aggressive drop below the latter level could confirm the bearish pattern and open the door to the 50.0% Fibonacci level of 0.7100.

On the flip side, in the event of an upside reversal, the next level to watch is the aforementioned  5-month high obstacle. A break above this level could see a re-test of the 0.7560 high taken from the peak on July 27.

NZD/USD 22/02/2018 | EconAlerts



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This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

source: XM

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