NZD/USD Technical Analysis | Forexlive
On the daily chart below, we can
see that the price has now come into the neckline of the major double
top at
0.6514. The divergence between the two tops and the MACD gives this pattern a higher
probability of working out.
To be confirmed, the price will
need to break the neckline and start the downtrend to see the sellers target
the 0.5860 level. The moving
averages are clearly pointing south so the bearish bias remains for now.
On the 4 hour chart below, we can
see that the price has come into the neckline diverging with the MACD. This is
a signal of a loss of momentum and generally we see a pullback or reversal.
In this instance, it should
signal a pullback given that the fundamentals turned in favour of the USD as
the market is repricing a higher terminal rate caused by all the recent
economic data surprising on the hot side.
We can see that for the pullback
a strong barrier will be the confluence of the trendline, the previous swing level acting
as resistance and the 38.2% Fibonacci
retracement level. We will most likely see sellers piling in
there.
On the 1 hour chart below, we can
see more closely the setup for the pullback. The levels for traders are clear.
Sellers can lean on the 0.6270 level with defined risk and can fold if the
price breaks above the trendline and starts rallying.
A break of the neckline at 0.6191
will give the sellers the conviction for the major downtrend and confirm the
double top. Buyers will need to break above the trendline to first target the
0.6390 resistance and on a further break the high of the double top at 0.6514.