The NZD/USD currency pair has exhibited a bearish trend through a significant portion of 2023. This analysis draws upon multiple technical observations and recent market dynamics that underscore a potential continuation of this bearish trajectory.
Recent Lows and Bearish Momentum: The pair recently plunged to a fresh low for 2023 at 0.5815, indicating a strong bearish momentum. Although there was a slight recovery to 0.5840, the overwhelming bearish pressure persists, signaling a potential further downside .
Critical Support Level:The level of 0.5800 has emerged as a crucial support zone. A sustained move below this level could unveil additional downside potential, possibly extending the bearish trend towards deeper values not witnessed in late October 2023 .
Yearly Trend and Correction Phase: Since the onset of 2023, the pair has been on a declining trajectory, moving from a yearly high of 0.6534 down to 0.5887. Although there was a minor correction phase around 0.5979, the prevailing trend remains bearish.
Tight Recent Trading Range: The pair navigated through a tight trading range recently, sustaining values near lows. Despite a fleeting run-up to 0.60555, the pair met with incremental selling pressure leading to a subsequent decline.
Trade Setup: Based on the prevailing bearish sentiment, a short swing trade setup is proposed: Entry Point: A short entry is advised at 0.595, aligning with a potential resistance zone near the recent correction phase. Stop Loss: A stop loss is set at 0.605, slightly above the recent run-up, to mitigate potential reversals against the trade. Take Profit: The take profit target is set at 0.575, near the critical support level, anticipating a further decline.
Recent Lows and Bearish Momentum: The pair recently plunged to a fresh low for 2023 at 0.5815, indicating a strong bearish momentum. Although there was a slight recovery to 0.5840, the overwhelming bearish pressure persists, signaling a potential further downside .
Critical Support Level:The level of 0.5800 has emerged as a crucial support zone. A sustained move below this level could unveil additional downside potential, possibly extending the bearish trend towards deeper values not witnessed in late October 2023 .
Yearly Trend and Correction Phase: Since the onset of 2023, the pair has been on a declining trajectory, moving from a yearly high of 0.6534 down to 0.5887. Although there was a minor correction phase around 0.5979, the prevailing trend remains bearish.
Tight Recent Trading Range: The pair navigated through a tight trading range recently, sustaining values near lows. Despite a fleeting run-up to 0.60555, the pair met with incremental selling pressure leading to a subsequent decline.
Trade Setup: Based on the prevailing bearish sentiment, a short swing trade setup is proposed: Entry Point: A short entry is advised at 0.595, aligning with a potential resistance zone near the recent correction phase. Stop Loss: A stop loss is set at 0.605, slightly above the recent run-up, to mitigate potential reversals against the trade. Take Profit: The take profit target is set at 0.575, near the critical support level, anticipating a further decline.
Trade active
Trade closed: stop reached