Forex Strategy: NZD/USD Gravestone Doji On Weekly Offers Omen
- NZD/USD Technical Strategy: Sidelines Preferred
- Bearish engulfing pattern on the daily warns of declines
- Given the short-term uptrend caution suggested when looking at shorts
The Kiwi’s bull-run has been halted at the 0.8635 level of resistance which has resulted in the emergence of a Bearish Engulfing candlestick pattern on the daily. While this may be warning of a potential reversal, caution is suggested when looking at shorting the NZD/USD, given the pair remains in a short-term uptrend signaled by prices being above the 20 SMA.
NZD/USD: Another Reversal Signal Emerges
Daily Chart - Created Using FXCM Marketscope 2.0
The presence of a Piercing Line formation near noteworthy support at 0.8510 may be hinting at an intraday bounce for the Kiwi. However, a recovery for the currency may be limited since the bulls appear to be finding little encouragement during Asian trading.
NZD/USD: Finds Support But Bounce May Be Limited
Four Hour Chart - Created Using FXCM Marketscope 2.0
Getting some broader context from the weekly chart; a Gravestone Doji near resistance at 0.8665 is noteworthy. While the candle has yet to close and receive confirmation, it will certainly be on the radar as potential omen of a more significant correction for the Kiwi.
NZD/USD: Warning on The Weekly On The Radar
Weekly Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
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