NZD/USD Falling Sharply within a Choppy Correction

0
109
NZD/USD Falling Sharply within a Choppy Correction

The NZD/USD is reversing last week’s rally. Let’s take a look at the charts and assess the technical development.

https://

In the 4H chart, we can see that price rallied last week from about 0.7425 to 0.7740. This week the kiwi-dollar formed a price top and broke below the 0.7633 support during the 4/23 session. The decline started in the 4/22 session and looks very sharp.

Now, NZD/USD is in a choppy market in the short to medium-term, so this bearish swing is not very helpful in terms of giving us a clue of the direction in the medium-term. In the very short-term we might say that the 0.7630-0.7660 should be monitored for resistance if there is a pullback. If price climbs back above 0.7660 and the RSI climbs back above 60, the choppy, bullish correction mode would likely still be in play.

If price falls below 0.75, and the 4H RSI falls to 30, NZD/USD might start to revive the prevailing bearish trend seen in the daily chart. This is because it would clear some key moving averages in the 4H and daily chart and break below a rising trendline from March’s low around 0.72.

The bearish outlook would first put pressure on the 0.7176-0.72 low on the year ,with risk of continuing lower because the prevailing downtrend would still be intact. One of the evidence of an intact bearish trend is that the daily RSI is still holding under 60, which reflects maintenance of the bearish momentum.

Previous Post by Author: EUR/USD Rebounds Despite Soft Manufacturing and Services PMIs

SHARE
Previous articleEuropean Regulator Asks Feedback on Bitcoin Technology
Next articlePoor UK Retail Sales Keeping a Leash on GBP
Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.