Morning Market Update – NZD/USD

A rejection at the top is formed at the 0.6892 level on the NZD/USD pair and intraday bias is turned neutral first. The pair trading with the 0.6892 resistance level intact on the downside. A further decline in the pair is expected. A decisive break of the 0.6854 level will target at the 0.6815 level next. However, the pair breaking at the 0.6878 level will dampen our bearish view and will turn bias back to the upside for the 0.6916 level instead.

In the bigger picture, the current development argues that the pair has defended at the 0.6892 level and with the 0.6892 resistance level intact. We’d favor the case that fall from this levels must be seen as correction. The pair breaking at the 0.6854 level will further affirm this bearish case. A larger decline from the 0.6892 level is not completed. However, on the other hand, a firm break of the 0.6854 level will indicate a further downside move in the upcoming session.

The recent run higher on the Kiwi has been good. A huge accelerating bull run has seen the market burst through the key until now. The market has been limited by the resistance band at the 0.6892 level on numerous occasions in the past candles but the dollar has gained its momentum and driven a breakout. The pair chasing the dollar here would though be a move filled with a significant reward. The pair’s momentum is clearly strong and also incredibly staying with the bears run may be rewarding in the very near term. However, if profit taking hits, it could be a sharp reversal. We keep watching for exhaustion signals as the pair seems to be gaining strong hold and don’t indicate any sign of exhausted. On the oscillator, it is also notable that the entirety of today’s session took place outside the 80.0 level standard deviations. The bulls were looking tired before the sharp gains, but again the move looks stretched and a close back inside the 80 levels would now be a corrective signal. A move back below the 80 level on the four hour chart would be a corrective signals that a closing level back inside the levels. The four hourly chart support turned resistance around the breakout at the 0.6878 level.

The pair returns to test the bearish channel’s resistance after leaning on the intraday bullish support line that appears on four hour chart, accompanied by stochastic reach to the overbought areas. We keep waiting to motivate the price to rebound bearishly to break at the 0.6878 levels and active the negative effect of the bearish pattern formed by the mentioned intraday channel followed by pushing the price to continue the main bearish trend.

Therefore, we believe that the chances are valid to trade negatively in the upcoming period that is conditioned by the price stability below the 0.6854 level. This reminds you that our main targets begin at the 0.6830 and extend to 0.6815 levels.

The pair’s expected trading range for today is between the 0.6892 resistance and 0.6815 support levels.

Expected trend for today: Bearish
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