Forex Technical Update
The NZD/USD is seen in the 4H chart failing to sustain a bullish continuation above 0.84 after a butterfly pattern. A sharp decline followed breaking below a rising trendline that extends back to the Dec. 15 low near 0.7460. After the break the market is now trading t a key pivot of 0.8245. A break below this pivot confirms topping and suggests an extension to the current bear run into a medium term correction against the rally since 0.7460.
Looking at the daily chart you can see that this support pivot use to be resistance going back to Oct. 28. 2011 as well. Below this pivot, we open up a retracement toward 0.8050, near 38.2% retracement and 200 day Simple Moving Average. The maximum anticipation for this decline should not exceed the 61.8% retracement level of 0.7827 which also represents the Nov-Dec resistance pivot. In fact if this bearish outlook materializes and pushes the RSI down to 40, we should anticipate some support ahead.
Fan Yang CMT is the Chief Technical Strategist of IBTRADE and FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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