Weekly
- Last Candlesticks pattern: Shooting star
- Time of formation: 5 Sep 2016
- Trend bias: Down
Daily
- Last Candlesticks pattern: Doji
- Time of formation: 25 Jul 2016
- Trend bias: Near term up
NZD/USD – 0.6976
Kiwi’s decline has accelerated after breaking support at 0.7130, adding credence to our view that top has been formed at 0.7376 and bearishness remains for the fall from there to bring retracement of early upmove to previous support at 0.6949, a daily close below this level would retain bearishness and signal the rebound from 0.6862 has ended at 0.7376, bring further fall towards 0.6900 later but reckon support at 0.6885 would hold from here due to near term oversold condition.
On the upside, whilst initial recovery to 0.7045-50 cannot be ruled out, reckon upside would be limited to the lower Kumo (now at 0.7088) and the Tenkan-Sen (now at 0.7109) should hold, bring another decline later. Only a daily close above the Kijun-Sen (now at 0.7174) would suggest low is possibly formed, risk a stronger rebound to resistance at 0.7247 but break there is needed to add credence to this view and encourage for further gain to 0.7300, however, price should falter well below said top at 0.7376.
Recommendation: Sell at 0.7100 for 0.6900 with stop above 0.7200
On the weekly chart, kiwi opened lower this week after last week’s selloff, adding credence to our view that the fall from 0.7376 is still in progress and may extend further weakness to 0.6900, however, as broad outlook remains consolidative, reckon downside would be limited to 0.6862 and price should stay well above 0.6780 (50% Fibonacci retracement of 0.6074-0.7486), bring another rebound later.
On the upside, expect recovery to be limited to 0.7100 and price should falter below the Kijun-Sen (now at 0.7133), bring another decline later. Only a weekly close above the Tenkan-Sen (now at 0.7163) would signal low is formed and suggest the retreat from 0.7376 has ended, bring a stronger rebound to 0.7247 resistance but break there is needed to provide confirmation, bring further gain to 0.7330-40, however, said resistance at 0.7476 should remain intact. Looking ahead, above there would extend the rebound from 0.6862 to previous resistance at 0.7403 but a sustained breach above there is needed to retain bullishness and signal the pullback from 0.7486 has ended at 0.6862, then the rise from 2015 low at 0.6074 may extend further gain to 0.7550 and later 0.7600, however, reckon upside would be limited to 0.7680 (1.618 times projection of 0.6074-0.6898 measuring from 0.6347), bring retreat later.
