Forex Strategy - NZD/USD Threatens Correction As Bulls Lose Out At 0.8600
- NZD/USD Technical Strategy: Sidelines Preferred
- Shooting Star offers bearish reversal signal but awaits confirmation
- Looking to 0.8500 as key support
The bulls have taken a breather as a Shooting Star formation on the NZD/USD threatens a correction for the pair. However caution is suggested when looking at ‘picking the top’ here given the uptrend remains intact and that there has been little downside follow-through post the bearish reversal signal. The Kiwi’s brushing aside of 2 prior Shooting Star formations during its recent run is also noteworthy. Thus waiting for a break below nearby support at 0.8500 before looking at shorts is preferred.
NZD/USD: Shooting Star Awaits Confirmation
Daily Chart - Created Using FXCM Marketscope 2.0
Looking deeper into intraday price action, the four hour chart suggests the potential for a bounce during the session ahead. This is highlighted by the Inverted Hammer candle formation near the 0.8510 mark. Yet gains may be limited given the context provided by the daily in addition to sellers likely sitting at the psychologically-significant 0.8600 level.
NZD/USD: 0.8600 May Cap Intraday Gains
Four Hour Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.