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The New Zealand dollar collapsed recently against the US dollar and traded as low as 0.7667. The NZDUSD pair broke an important support area and traded lower. It is important to note that the recently released employment report in the New Zealand, which was somehow better than expected. However, it looks like the NZDUSD pair has completely ignored the data and traded lower. This suggests that the pair is under severe bearish pressure and more downside cannot be denied from the current or a bit lower levels. There are a lot of important economic releases lined up during the NY session, which could impact the pair moving ahead.
There was an important bullish trend line formed on the hourly chart of the NZDUSD pair, which was broken recently. This break ignited a solid downside run towards the 0.7660 support area. The pair is now correcting higher and struggling to trade above the 50% fib retracement level of the leg from the 0.7840 high to 0.7767 low. So, there is a chance that the pair might have completed the correction and move lower again from the current levels. One important point to note from the charts is that the 100 hourly moving average is also sitting around the 50% fib level. So, the chance of a bearish move is more moving ahead.
Alternatively, if the pair moves higher and settles above the 100 MA, then it might continue trading higher towards the last swing high of 0.7840.
Overall, one might consider selling rallies as long as the pair is below the 100 MA.
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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com
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