Forex Strategy - NZD/USD Candles Highlight Indecision Near 0.8500
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- NZD/USD Technical Strategy: Sidelines preferred
- Confirmation needed as signs of indecision emerge
- Price action post RBNZ decision may confirm technical bias
There are signs of indecision amongst NZD/USD traders as the pair continues to struggle ahead of the critical 0.8500 handle. This is demonstrated by several long upside wicks for candles on the daily chart, which follow on from a Shooting Star formation. While the Shooting Star represents a bearish reversal pattern, it has failed to materialize in a successive down-day, which suggests the bears are hesitant to move in just yet.
Drilling down, the four hour chart reveals a shorter-term range between 0.8454 and 0.8510. The Hammer formation there suggests that there is the opportunity for an intra-day bounce, however given the signals on the daily, follow-through into the rest of the week may be limited.
The next 24 hours will prove critical for the Kiwi, given that the RBNZ rate decision may have a significant impact on price action, which could act to confirm a technical bias. Sign up and log into DailyFX-Plus to join John Kicklighter as he covers the decision and its impact on the markets in the Live Trading Room.
Confirm your chart-based trade setups with the Technical Analyzer.
4 Hour Chart - Created Using FXCM Marketscope 2.0
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by David de Ferranti, Market Analyst, FXCM
Contact and follow David on Twitter: @Davidde
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