FxWirePro

NZD/USD forms “3 black crows on daily & Shooting Star on weekly"

FX:NZDUSD   New Zealand Dollar/U.S. Dollar
169 2 3
NZDUSD             has formed 3 black crows candlestick pattern at peaks of intermediate trend, which is bearish in nature.

As a result of the formation of this bearish pattern , current prices have slid below DMAs.

If the Fed continues to signal a dovish stance, then APAC along with Asian asset baskets can rally further, while, NZD is likely to trade cautiously ahead of a big week for central banks, with the dubious eyes on RBNZ’s announcement on Thursday sandwiched between the Fed’s and the BoJ’s.

Ever since the pair has bounced back from the lows of 0.6347 levels, Kiwi dollar seemed like consolidating stronger from last couple of weeks but for now “Shooting Star” pattern occurred at 0.6851 levels.

This bearish pattern on weekly occurring at stiff resistance of 0.6896 levels to signify some sort of weakness at this juncture.

After dropping from major this resistance at 0.6896 levels indicates previous consolidation trend seems again little weaker and more potential for downside to targets.

On daily terms, the current prices are testing resistance at 21DMA around 0.6881. 

On intraday terms, if it doesn't hold onto the resistance at 21DMA, dips upto 30-40 pips is quite possible, on the contrary bounces are also likely upon sustaining this resistance.

On weekly basis, Every time price was unable to hold onto resistance at 0.6896 levels it has dropped below to evidences dips upto 0.6425 levels, current price actions has dropped at the same levels.

RSI and  Stochastic oscillators on both daily and weekly graphs are suggestive of further declines as they evidence downward convergence to the price dips on daily divergence on weekly shows previous consolidation pattern seems exhausted at this level. 

While, %D crossover at 80s which is overbought zone on weekly plotting have been convincing that the selling momentum is still strong.

Hence, considering above technical reasoning, one can eye on option tunnel which is debit spread of binary version.

In-The-Money tunnel would be formed of shorts of in-the-money binary put with shorter expiries below the current exchange rate less an Out-Of-The-Money longs binary delta put below the exchange rate.

We wouldn't be surprised if the spot FX drifts upto 30-40 pips below current levels of 0.6875 levels in no time or 20-25 pips on northwards in intraday terms.
mahmoodnoori
7 months ago
Thanks .
Reply
FxWirePro mahmoodnoori
7 months ago
Most welcome.
Reply
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