Are bears creeping up on NZDUSD?
PRESS RELEASE Written on 15/03/2021 by Theunis Kruger, FX Trainer at FXTM
The New Zealand dollar (NZD) was extended on the daily time frame until 25th February with a recorded higher top at 0.74649. Unfortunately, the upward momentum was pressured by the bears shortly after. The market broke through the 15 and 34 Simple Moving Averages, and the Momentum Oscillator crossed into negative terrain as it pierced through the zero baseline. Both technical indicators, the market structure of lower tops and a lower bottom, confirmed that the bears exercised enough pressure to start a new downward trend.
A possible critical support level was formed on 5th March at 0.70990, after which the bulls started pushing back. They failed near a resistance level at 0.72406 on 11th March. As such, it looks like the bears want to retake control of the market again.
If the NZD breaks through the critical support level at 0.70990 and makes another lower bottom, three possible price targets could be calculated from there. By applying the Fibonacci tool to the bottom of the support level at 0.70990 and dragging it to the resistance level at 0.72406, the following targets may be considered:
– The first target could be projected at 0.70115 (161 %).
– The second price target may be cast at 0.68699 (261.8%), and the third target could be expected at 0.66408 (423.6%).
If the resistance level at 0.72406 is broken, the above scenarios would no longer be valid and appropriate action would have to be taken.
As long as investors maintain a negative sentiment and supply continues to overcome demand, the outlook for the NZD on the Daily time frame will remain bearish.
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