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  • NZD/USD bears anticipating a healthy correction, but daily structure is still bullish.
  • A break of daily support opens risk of a 38.2% Fibonacci retracement of weekly impulse. 

NZD/USD is opening the week on the bid between 0.7038 the low and 0.7049 the high, trading some 0.14% higher at the time of writing. 

The price has been in a strong rally through weekly/daily resistance but could be due a healthy correction.

The following is a top-down analysis that illustrates daily support and prospects of a double top scenario.

Monthly chart

(Bullish medium term, bearish short-term).

As can be seen, the price of the kiwi has rallied through resistance and can be expected to stall, correct and offer another opportunity to trade the ebbs and flows on lower time frames.

Weekly chart

(Bullish medium term, bearish short-term).

From a weekly perspective, the 38.2% Fibonacci would be the first level for where bears can be expected to aim for.

Daily chart

(Bullish near-term, bearish towards 38.2% Fibo).

Meanwhile, from a daily perspective, the structure and price action are bullish and a higher high can be expected before a reversal. 

However, an M-formation would be a layer of bearish confirmation, especially of a break below the structure followed by a restest of the old support structure, expected to act as resistance.