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  • NZD/USD has run into a wall of supply and struggles to maintain its northerly fight path. 
  • There is scope for a continuation on the upside if the bird can get over the current resistance.
  • While below resistance, the bias is towards the downside. 

The bird has flown into a wall of supply and has corrected to a 38.2% Fibonacci of the 25th August daily impulse where it meets a prior resistance structure made up of mid-July to early August business. 

The bears will look for the retest of the current spot market’s resistance at 0.6730/40 to hold the test of time for an opportunity for further downside targets located in the 0.6600 and 0.6630 areas.

Monthly chart

Weekly chart

The above illustration is an example of potential price action if the resistance holds. 

Daily chart

It could be a little ambitious to aim for the 61.8% considering how far the bird has flown since taking off from the mid August lows.

However, the 4HR chart offers roo to a 50% mean reversion with little to no structure in the way once the current lows are broken.

4HR chart

 

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