Price has climbed steeply. This indicates that price has moved too quickly. Steep and quick is a set up for price to decline anytime. Look at the price levels marked by the horizontal 3 black lines. These are potential areas for price to descend to. Price is also diverging away from the rsi. Rsi line marked on chart is flatter relative to the price climb. Watch...
RSI is overbought and beginning to tip. You have sellers into supply (black lined banded area) where they would be to take shorting positions. I have marked profit target areas.
NZD tapping out on RSI hit just below R2 resistance. Expect fall soon. USD bullish and at an end for downside, or at least pretty close. Downside target for NZD is pivot at .7006. Need break at R1 .7124 for confirmation.
FX_IDC:NZDUSD
Several factors pointing to a reversal in price:
- Fibonacci Cluster (161.8% extension, 327.2% projection, 70.7% retracement)
- 9 month Trend line Resistance (9/7/16-present)
- Elliott Wave 5 Top
- Supply zone
- Doji candlestick
Tough to short against such a strong uptrend, therefore look for confirmed reversal in form of back to back bearish...
I just entered right now at .0742 for the completed Shark pattern. Price seems to be stalling in this area and there is bearish divergence present on both the RSI and AO. The hourly AO just turned red as well for a little extra confluence.
I am only risking ~10 pips on this first try and targeting 0.6927 for a potential bullish 5-0 pattern. As per my strategy...
June New Zealand dollar has created a mini head and shoulders, plus a bearish flag. USD was up sharply today. Looking for more gain on USD and possible fall of the NZD. Next downside target is 78.6 FIB, .6914. This would start to fill out the last bit of the Bearish BAT pattern.
New Zealand dollar has produced a tweezer top reversal pattern. Friday's rejection of higher prices suggests a lower price Monday. The USD has produced an evening star doji, which might produce one more push up to finalize that last shoulder of the H&D and then head down. NZD also produced a evening start reversal Tuesday indicating a reversal on Thursday.
Kiwi likely to come under pressure on RBNZ rate cut, which is already priced in but the current risk off sentiment could weigh on the New Zealand dollar (N61!) in the near term. Watch the head and shoulders pattern, which will be triggered on the break of the rising neckline support.
Downside targets: $0.7030 and $0.7000
All signals are a go on this one as well.
One could buy the future contract or sell a put option for a more conservative approach.
Futures trading involves risk of loss and may not be suitable for all investors.
Overnight swaps market and economists are calling for further cuts. If the RBNZ does cut, is the move fully discounted? If they don't cut, how much of the market would be caught off-guard?
