The US is about to raise interest rates and is closer to a tightening .
The RBNZ is cutting deposit rates as economy is much affected by Chinese economic stagnation.
This divergence, causes investors to prefer holding US dollar based assets.
We like to spot pairs that are trending to ride the market on the trend direction on the long term. This is one of the nicest pairs forming a good that could send us to new lows with fresh opportunities to jump in. Prices broke the weekly 200 day moving average on September of last year, suggesting more downward bias, which already did.
Major support levels cleared
FIRST: A major was the first blue horizontal line @0.8048 as prices found a and pushed back up, a breach of this price level gave in more bias to this pair. To find testing to the SECOND .
SECOND: Prices reached the second @0.7684 which was the support of July 2013 . The formation caused prices to surge up in 2013 . In December 2014 this area was re-tested and was breached to send us into more bias and to test the THIRD major support.
THIRD: Looking back at 2011 and 2012 we can notice to major formation that surged prices and rejected going lower. This area of support @0.7465 was breached in January 2015, to take prices even lower.
FOURTH: After breaching the third , prices formed another @0.7157 given by the lowest arrow, sending prices to re-test and try to breach the previous support of 0.7685 (Second support line) which became now resistance. Prices failed to breach this area and went back following the trend to break below the fourth adding more bias.
I am targeting that this pair will reach 0.60 by end of this year.
I believe that this pair will find its next support at 0.6541 and will have to re-test before it could continue riding down the trend. The retest might be found at the 0.61 fib found at the first red horizontal line @0.6800 or @0.38 fib found at the second horizontal line @0.6541.
What do we do?
We got jump into market at market price and wait for prices to jump down to find support at 0.65417. If prices did find support and shifted direction for retesting, we will be moving our stop losses to the positive territory and make some short term money out of this short move.
OR we could wait for prices to form any technical formation, that could give us an opportunity to jump into a retracement.