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Forex Strategy: NZD/USD Teases At Break of 2013 High

Forex Strategy: NZD/USD Teases At Break of 2013 High

David de Ferranti, Currency Analyst

Talking Points

  • NZD/USD Technical Strategy: Sidelines Preferred
  • Bearish Engulfing pattern on the four hour chart warns of intraday declines
  • Uptrend remains intact on daily cautioning against shorts

The Kiwi has stalled around the 0.8670 mark following several failed attempts at a run above its 2013 high. However, while the bulls may have taken a breather, the absence of a bearish reversal candlestick pattern on the daily does not suggest a meaningful correction at this stage.

NZD/USD: Rally Stalls Near 2013 High

Forex-Strategy-NZDUSD-Teases-At-Break-of-2013-High_body_Picture_3.png, Forex Strategy: NZD/USD Teases At Break of 2013 High

Daily Chart - Created Using FXCM Marketscope 2.0

Drilling down to examine intraday price action; the formation of a Bearish Engulfing candlestick pattern nearby the psychologically-significant 0.8700 handle is noteworthy. The signal has received confirmation from a successive down period but has received little follow through. A break below resistance-turned-support at 0.8640 is likely to open the 0.8600 handle.

NZD/USD: Warning of Intraday Declines From Bearish Engulfing Pattern

Forex-Strategy-NZDUSD-Teases-At-Break-of-2013-High_body_Picture_2.png, Forex Strategy: NZD/USD Teases At Break of 2013 High

Four Hour Chart - Created Using FXCM Marketscope 2.0

The Gravestone Doji on the weekly has failed to receive confirmation from a successive down period. With prices in a continued uptrend a break above 0.8665 would favor longs with a target near resistance at 0.8830.

NZD/USD: Traders Look Past Gravestone Doji

Forex-Strategy-NZDUSD-Teases-At-Break-of-2013-High_body_Picture_1.png, Forex Strategy: NZD/USD Teases At Break of 2013 High

Weekly Chart - Created Using FXCM Marketscope 2.0

By David de Ferranti, Market Analyst, FXCM

Follow David on Twitter: @Davidde

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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