NZD/USD Piercing Line Fails To Sustain Momentum As Recovery Stalls
- NZD/USD Technical Strategy: Sidelines Preferred
- Piercing Line Struggles To Sustain Upside Momentum
- Close Below 0.8400 To Open The 0.8260 Floor
As suggested in recent reports; the Kiwi would struggle to sustain upside momentum in spite of a Piercing Line formation lying in its wake. The bullish reversal signal suggested the potential for a corrective bounce, however a further recovery was likely to prove difficult with the short-term downtrend intact. A push below the nearby 0.8400 barrier would set the scene for a descent towards the mid-February lows near 0.8260. Conversely a daily close above the pair’s recent highs at 0.8530 would be required to mark a small base.
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
An examination of intraday price action on the four hour chart below reveals a Bearish Engulfing formation is emerging. If confirmed by a successive down period, it would open a retest of NZD/USD’s recent lows near 0.8420.
NZD/USD: Bearish Engulfing Formation Developing In Intraday Trade
Four Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
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