NZD/USD traded lower yesterday, breaking below the support (now turned into support) zone of 0.6385, thereby completing a failure swing top formation. Although this may have turned the short-term outlook to the downside, we would like to see a decisive dip below 0.6350 before we start examining further declines. That zone acted as a strong resistance on September 25th and October 11th.
If the bears are willing to overcome that hurdle, this would also place the rate below all three of our moving averages on the 4-hour chart and may allow the slide to continue towards the 0.6315 zone, slightly below the inside swing high of October 15th. Another break, below 0.6315, could carry more bearish implications, perhaps towards the 0.6285 zone, near the low of October 17th.
Looking at our short-term oscillators, we see that the RSI lies below 50 and points down, while the MACD, already below its trigger line, has just touched its toe below zero. Both indicators detect downside momentum and support the notion for NZD/USD to continue drifting south for a while more.
On the upside, a break above the high of September 12th, at 0.6450, may be needed for the short-term picture to turn back to positive. Such a break may initially pave the way towards the highs of August 13th and 14th, at around 0.6470, the break of which could open the path towards the 0.6500 zone, which is fractionally above the high of September 9th.
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
75% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.