NZDUSD Monday Plunge Sets Bear Tone

Technical Analysis


Our view has been recently that the April Double Top was reinforced by the probe below key .7422, which neutralized the Q1 Double Bottom for a shift to a broader range theme, with risk of a bearish shift through .7391.

The bearish outside pattern Monday to plunge through .7391 confirmed this view of a more bearish bias and leaves the focus lower for Tuesday and into May.

For Today:

  • We see a downside bias for .7300; break here aims for key .7274 and maybe .7245.
  • But above .7406 opens risk up to .7445, which we would look to try to cap.

Short/ Intermediate-term Outlook – Downside Risks:

  • We now see a more negative tone with the bearish threat to 7274.
  • Below here targets the cycle lows at .7192/76 and key .7110 spike low from 2011.

What Changes This? Above .7522 eases bear risks; through .7577 signals a neutral tone, only shifting positive above .7744.

Momentum: The 8-day RSI, short-term momentum is falling and has scope to go still lower this week.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.