© Dukascopy Bank SA
NZD/USD is recovering after a drop from 0.8236 on 30th of April to 0.7458 on 23rd of May and has formed a Channel Up pattern on the 4H chart . The pattern has 50% quality and 99% magnitude in the 287-bar period.
The pattern started when the pair bounced from 0.7456 and after testing pattern's resistance twice it slowed down slightly above SMA200 at 0.8049 where the pair is currently trading. The RSI and the Stochastic indicator on 4H and technical indicators on aggregate on 1D time horizon point at appreciation of the pair indicating that we should see a price correction in the short time and that SMA200 is strong support level for the pair in the medium term. Long traders could set the first target at the daily pivot (PP) at 0.8067. If this level is breached, next targets could be at the daily pivot at 0.8097 (R1) and 14th of August high at 0.8115.
Technical indicators on aggregate point at depreciation of the pair on 1W outlook indicating that the pair should eventually breach pattern downwards. The SWFX market sentiment is currently almost equally divided between long and short position holders, but in the range of 100 pips from the current price 55% of orders are sell indicating that market participants expect the pair to depreciate further. Short traders should focus on the SMA200 at 0.8032. If this level is breached, next targets could be at the daily pivot (S1) at 0.8019 and pattern's support at 0.7991.
© Dukascopy Bank SA