Forex Strategy: NZD/USD Eyes 0.8500 With Bullish Signal Absent
- NZD/USD Technical Strategy: Sidelines Preferred
- Doji signaled indecision near key 0.8700 handle
- 0.8500 mark likely to provide support
The NZD/USD has conducted an about-face following several failed attempts at a breakout above its 2013 high near 0.8700. The Doji noted in recent candlesticks reports helped signal fading momentum amongst the bulls. While sellers briefly paused at the 0.8600 handle the pair was quick to resume its declines in Asian trading today. A break below the next psychologically-significant level at 0.8500 would likely offer a downside target near 0.8400.
Daily Chart - Created Using FXCM Marketscope 2.0
Drilling down to examine intraday price action; a bullish reversal signal is notably absent, which puts a potential bounce in doubt.
NZD/USD: Signs of A Bounce Absent
Four Hour Chart - Created Using FXCM Marketscope 2.0
Finally, taking some broader context from the weekly chart; a Bearish Engulfing pattern appears to be forming which could warn of a more significant decline for NZD/USD. However, the second candle has yet to close and receive confirmation from a second down period to be validated.
NZD/USD: Bearish Engulfing Pattern Forming
Weekly Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
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