Had we not raised this in our previous post “FxWirePro: NZD/USD price, volumes and open interest act as per bears whim fancy – Snap rallies for fresh short build ups”. Please refer below weblink for more reading:
The pair collapsed to the lows of 4 and half months i.e. 0.6971, and rest in history but for now, manage to the current levels of 0.7003.
The dollar managed to break the important support today against Kiwi dollar after recent FOMC minutes and yesterday’s Kiwis trade balance numbers.
Expect more slumps upon slide below support 0.7080 & 21DMA after rejecting stiff resistance
21-SMA crosses over 7-SMA on weekly chart which is a crossover that signals more weakness.
Additionally, you could probably make out that the huge volumes being established on declining trend on both weekly and monthly terms. While weekly also evidences the crossover to signal more slumps on the cards in the upcoming weeks.
On a broader perspective, at peaks, consolidation pattern sensing weakness at 50% Fibos.
For now, you could expect more declines as it breaks below 38.2% Fibos, rejected resistance of 0.7485 (16-months) and expect 0.68 as it slid below EMAs.
Most importantly, please be noted that the volumes are massive on declining prices (see huge histogram to indicate huge volumes) while leading indicators on both timeframes are indicative of selling momentum.
Hence, we advise one can still eye on fresh short build ups via mid-month contracts snapping every rally for targets of 0.6946 levels and even upto 0.6812 levels (i.e. 23.6% fibos) upon breach of the 1st target, maintain a strict stop loss of 0.7122 and 0.7184 levels.