Since the beginning of November NZD/USD has been rising consistently. On November 4th, the price cleanly rejected the ascending channel, but on the next day, it broke to the upside under strong buying pressure. Fibonacci retracement indicator was applied to the correction down, where NZD/USD rejected the ascending channel.
It shows that on December 2 price has bounced off cleanly the 361.8% retracement level at 0.7083, suggesting that the top could have been reached for the current bullish wave.
There was an attempt to break to the upside, although after spiking above the 0.7083 resistance, NZD/USD failed to close higher. At the same time, the RSI oscillator formed a bearish divergence, after which the price broke below the 50 Simple Moving Average. This is yet another bearish sign for NZD/USD, which might result in a correctional move down.
As long as the pair remains below the 0.7083 - 0.7103 resistance area, a corrective or a reverse move down should be expected. It can end up sending NZD/USD down towards one of the Fibonacci support levels. The nearest support is at 0.6980, which corresponds to the 23.6% Fibs as well as the top of the extended descending channel. If/when reached and broken, the next support is at 0.6900, which is a psychological level that goes in line with the previous supply/demand area. And the final downside target is located at 0.6840, which corresponds to the 50% Fibs of the overall upside move, and 88.6% Fibs of the last upside wave.
All-in-all, NZD/USD trend remains bullish, but as long as current resistance is being respected, NZD might lose over 200 pips to the USD, before/if the uptrend continues.
Key support levels: 0.6970, 0.6900, 0.6840
Key resistance levels: 0.7083, 0.7103
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Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
It shows that on December 2 price has bounced off cleanly the 361.8% retracement level at 0.7083, suggesting that the top could have been reached for the current bullish wave.
There was an attempt to break to the upside, although after spiking above the 0.7083 resistance, NZD/USD failed to close higher. At the same time, the RSI oscillator formed a bearish divergence, after which the price broke below the 50 Simple Moving Average. This is yet another bearish sign for NZD/USD, which might result in a correctional move down.
As long as the pair remains below the 0.7083 - 0.7103 resistance area, a corrective or a reverse move down should be expected. It can end up sending NZD/USD down towards one of the Fibonacci support levels. The nearest support is at 0.6980, which corresponds to the 23.6% Fibs as well as the top of the extended descending channel. If/when reached and broken, the next support is at 0.6900, which is a psychological level that goes in line with the previous supply/demand area. And the final downside target is located at 0.6840, which corresponds to the 50% Fibs of the overall upside move, and 88.6% Fibs of the last upside wave.
All-in-all, NZD/USD trend remains bullish, but as long as current resistance is being respected, NZD might lose over 200 pips to the USD, before/if the uptrend continues.
Key support levels: 0.6970, 0.6900, 0.6840
Key resistance levels: 0.7083, 0.7103
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.