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NZD/USD Technical Strategy: FLAT
- Morning Star candlestick pattern hints at New Zealand Dollar bounce
- Divergence on 4-hour RSI bolsters the case for ebbing selling pressure
- Upswing may offer opportunity to sell into the broader bearish trend
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The New Zealand may be readying an attempt at recovery against its US counterpart after prices slid to the lowest level in over four months. The appearance of a bullish Morning Star candlestick pattern may precede a bounce. Whether such a move marks a correction or genuine reversal remains to be seen.
Zooming in from the daily chart to shorter-term positioning, the setup on the four-hour timeframe reveals positive RSI divergence that bolsters the case for ebbing upside momentum. Immediate trend resistance is still holding however, so it is premature to say whether an upswing or sideways drift will follow.
Absent further confirmation, standing aside seems prudent. With that said, selling into signs of topping after a bounce to retest trend-defining resistance near 0.7140 seems like an attractive proposition, were such an opportunity to materialize. Near-term price action will be closely monitored for progress.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
