NZD/USD Update: Considerable weakness

15 AUG 2018

The lower part of the weekly trading range at  0.6870 has failed to keep the bears in check. A full swing down trend has once again taken hold after cancelling out the weekly trading range. Focus is now on the (flimsy) support at 0.6390 and 0.6250. Due to the dynamics of the current trend is it not too likely this zone will hold out.

Use the minor recoveries to enter short.

  • Near-term trend: negative
  • Long term trend: negative
  • Outlook: bearish once again…
  • Strategy: avoid or sell-rallies
  • Support: 0.6390 / 0.6250-
  • Resistance: 0.6875 / 0.69+
  • Outlook cancelled/neutralized: 0.6900

Weekly chart NZD/USD

8 MAY 2018

The anticipated bullish breakout did not materialize. Indeed, the failed breakout (of 2017) leads to the regular sell-off. Prices are heading towards the main support area between 0.6870 and 0.68. Some overshooting is allowed for due to the high momentum of the intraday down trend (and general USD strength).

However, a convincing break below 0.68 would be particularly bearish for the longer term; no major levels are found until ~0.6250. Until a breakout occurs this market is only interesting for range traders. As with almost all USD crosses, there is a growing bullish-USD bias.

  • Near-term trend: negative
  • Long term trend: neutral
  • Outlook: choppy but neutral
  • Strategy: range trading or avoid
  • Support: 0.6870 / 0.6800 / 0.6250-
  • Resistance: 0.7165 / 0.7360 / 0.7520
  • Outlook cancelled/neutralized: n/a

Weekly chart NZD/USD

12 APR 2018

A relatively rare development is unfolding on the weekly chart below. A ‘failed breakout failure’, so to speak. Breakout failures (B) are common and logical: strong resistance is broken for stop-hunting and the ensuing drop back below pivots get the initial shorts by surprise as well as forces new longs out of the market. This generally leads to a larger sell-off (at point C).

In this case, rather than triggering a sell-off, the market is again pushing beyond the ‘flush-point’, meaning (reflecting) much stronger demand and a situation in which flush-sellers are getting caught on the wrong side. The best thing (from a trading viewpoint) of such a double flush is the reliability of a second push (higher in this instance).

A good buy-signal is triggered above 0.74 and a very strong buy-signal is triggered above the flush-high at 0.7520. In anticipation of a rally above this pivot we strongly recommend getting on the long side of the market. Fireworks are very likely indeed. The length of the rally is less certain, but 0.7955 is a decent minor projection to first focus on. We are preparing a new Trade Idea for our list and needless to say we personally are entering the long-side as well.

  • Near-term trend: positive
  • Long term trend: neutral
  • Outlook: strong uptrend > 0.74 and especially 0.7520
  • Strategy: long-entry
  • Support: 0.7280 / 0.7200 / 0.7120
  • Resistance: 0.7400 / 0.7520 / 0.7955*
  • Outlook cancelled/neutralized: below 0.7200

Weekly chart NZD/USD

23 MAR 2018

Sellers have failed to trigger a convincing breakout below the key 0.72-support zone. Generally such failures lead to a strong counter move, in this case upward. A recovery towards 0.7340 and perhaps 0.7430 can be expected. The long-term outlook remains neutral between roughly 0.6850 and 0.75.

  • Primary trend: neutral
  • Outlook: consolidation, recovery in neutral range
  • Strategy: range trading only
  • Support: 0.7200 / 0.7120
  • Resistance: 0.7280 / 0.7340 / 0.7430 / 0.75+
  • Outlook cancelled/neutralized: n/a

Daily chart NZD/USD

20 MAR 2018

Pressure is mounting within the relatively neutral phase since early 2018. Expect a serious test of the major pivot at 0.7200 soon. Closing below this area means an end of the neutral phase and the start of a correction back to 0.7120 and 0.6985 thereafter. On the weekly chart a decline all the way back to levels as low as 0.6850 cannot be excluded. Caution!

  • Primary trend: neutral
  • Outlook: consolidation, neutral with bearish bias
  • Strategy: avoid or trading-short < 0.7200
  • Support: 0.7200 / 0.7120 / 0.6985*
  • Resistance: 0.7265 / 0.7340+
  • Outlook cancelled/neutralized: n/a

Daily chart NZD/USD