European Union Foreign Exchange

NZD/USD hovers below 3-month high

NZD/USD has been in a flying mode over the last six days after the rebound on the 0.6505 support level.

The rally brought the price even higher, creating a strong upside correction mode, reaching a new three-month high around the 61.8% Fibonacci retracement level of the downleg from 0.7060 to 0.6423, at 0.6812.

Looking at 4-hour oscillators though, there are signs that the latest rebound may be over, and a bearish move is possible. The RSI turned marginally down after it reached the overbought area, while the MACD, although above both its zero and trigger lines, shows signs of topping as well. Also, the stochastic is moving lower.

nzd/usd forex 08112018

Currently, the price is trading slightly lower and the next stop could come at the 0.6760 support level. A clear dip below this barrier could send prices towards the 50.0% Fibonacci of 0.6740, while slightly below, the 0.6725 level holds as well, taken from the peak on August 28.

If the bulls continue to have the upper hand, the price could actually challenge the 61.8% Fibonacci region of 0.6815 and then the expectation is a touch of 0.6850, identified by the high on July 26.

Overall, NZD/USD posted a sharp upside movement but indicators signal a bearish retracement for the next few sessions.

by Melina Deltas, XM Investment Research Desk

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities.

Melina studied Pure Mathematics at Lancaster University and has a Master’s Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).

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