NZD/USD Candlestick Analysis: Bounce Extends for 4th Week

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Talking Points:

• NZD/USD Strategy: Flat
• Recovery Continues for Fourth Week
• Key Resistance Below 0.76 in Focus

The New Zealand Dollar is pushing higher having completed a bullish Morning Star candlestick pattern and cleared resistance at 0.7418, the 14.6% Fibonacci retracement. From here, a break above the intersection of channel resistance-turned-support and the 23.6% level at 0.7567 aims for the 38.2% Fib at 0.7809. Alternatively, a move back below 0.7418 threatens to open the door for a descent back to January’s swing low at 0.7175.

The dominant long-term NZD/USD trend looks to be favoring the downside. As such, we will treat any on-coming gains as an opportunity to enter short at more compelling levels once the correction is exhausted.

Weekly Chart - Created Using FXCM Marketscope

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com