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NZD/USD At A Critical Juncture As Hammer Awaits Confirmation

NZD/USD At A Critical Juncture As Hammer Awaits Confirmation

David de Ferranti, Currency Analyst

Talking Points

  • NZD/USD Technical Strategy: Sidelines Preferred
  • Hammer awaits confirmation near critical support
  • Bearish Engulfing pattern may see limited response

The 0.8600 handle continues to offer noteworthy support for the New Zealand Dollar. While prices crossed below the critical support level in intraday trade yesterday the bulls returned in force resulting in a Hammer formation on the daily. While considered a bullish reversal signal, the pattern has yet to receive confirmation from a successive-up day which leaves the Kiwi at a critical juncture in the session ahead.

NZD/USD: 0.8600 Continues To Support Prices

NZDUSD-At-A-Critical-Juncture-As-Hammer-Awaits-Confirmation_body_Picture_2.png, NZD/USD At A Critical Juncture As Hammer Awaits Confirmation

Daily Chart - Created Using FXCM Marketscope 2.0

Drilling down to the four hour chart; there are already signs of hesitation from the bulls as demonstrated by the Bearish Engulfing pattern. Given the proximity to support at 0.8600/05 we need to see some additional price action to help confirm a technical bias over the remainder of the week.

NZD/USD: Awaiting Further Signs Near 0.8600

NZDUSD-At-A-Critical-Juncture-As-Hammer-Awaits-Confirmation_body_Picture_1.png, NZD/USD At A Critical Juncture As Hammer Awaits Confirmation

Four Hour Chart - Created Using FXCM Marketscope 2.0

By David de Ferranti, Market Analyst, FXCM

Follow David on Twitter: @Davidde

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