NZDUSD Daily – Bears back on the battlefield?

ForexFraud

Written on 28/09/2020 by Theunis Kruger, FX Trainer at FXTM

NZDUSD on the D1 time-frame was in an extended uptrend until the 18th of September when a higher top was recorded at 0.67962. Supply pressure then toppled the bulls and the market started moving lower.

After the higher top at 0.67962, the market broke through the 15 and 34 Simple Moving Averages, the Momentum Oscillator crossed into negative terrain as it pierced through the zero baseline, and a Bearish Japanese Candlestick formation called Three Black Crows was formed. All three technical indicators confirmed that the bears had exerted pressure and that resulted in the start of a likely new downtrend.

A possible critical support level was formed on the 24th of September at 0.65099 after which the bulls started pushing back. They have since been trying to drive the Kiwi higher.

If the NZDUSD pair breaks through the critical support level at 0.65099, three possible price targets may be calculated from there. Applying the Fibonacci tool to the bottom of the support level at 0.65099 and dragging it to a possible resistance level near the 34 Simple Moving Average at 0.66371, the following targets may be considered. The first target can be projected at 0.64313 (161 %). The second price target may be predicted at 0.63041 (261.8%) and the third and final target may be expected at 0.60982 (423.6%).

If the resistance level at 0.66371 is broken, the above scenarios are annulled, and appropriate action must be taken.

As long as sellers maintain a negative sentiment and supply keeps overwhelming demand, the outlook for the Kiwi on the Daily time-frame will remain bearish.

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