NZD/USD continues to struggle to sustainably break below key support at 0.6503/6489 despite the USD strength seen on Friday, however, a break below here would still complete a top, according to the Credit Suisse analyst team.
Key quotes
“NZD/USD posted a neutral session on Friday, leaving our cautious outlook for the cross unchanged as the market still holds a large bearish ‘outside day’ and a bear ‘wedge’ and the potential for a ‘head and shoulders’ top. Furthermore, the close below the 55-day average and the cross below zero in daily MACD also provide further bearish technical signals.”
“We look for further weakness below 0.6503 /89, which would open up a move to the 23.6% retracement of the 2020 rally at 0.6422 initially, then our ‘wedge measured objective’ at 0.6400/6377. It’s worth highlighting the potential ‘measured objective’ to the larger potential top is at 0.6290.”
“Short-term resistance moves to 0.6571, above which would trigger a recovery back to the short term downtrend from the 2020 high at 0.6627/51. Only above here would remove the downside bias.”
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