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Technical Analysis: NZDUSD Slides to 0.6750, 14-DMA Toppish at 0.6800

Posted by Chris Advincula on Mar 7, 2016 4:18:15 AM

NZDUSD.3.7.2016.jpg

The 5-minute chart shows a double top formation at 0.6805 suggesting limited gains and a reversal. This particular level 0.6800 is also looking toppish on the 14 day moving average (Green Line on both 5 minute and Daily Chart). The RBNZ mentioned for rates to stay on hold last Jan 28 and further depreciation would be appropriate. Despite the dovish rhetoric, kiwi rebounds to 0.6820 Fri 3/28 from 0.6450 Jan 28.

The Asian session open at 0.6820 has shown a downward bias to 0.6755 with the US dollar gaining strenght after Friday's US Jobs Data. Offers at 0.6800 and cross actions are setting the intitial selling pace in Europe. The 5 minute chart approaches the first level of support 0.6750, but the 14 day moving average appears to show more downward momentum after breaking 0.6752 14 DMA support line.

The Daily Chart shows descening peaks from 0.6900 to 0.6870 Dec 28 high. The 14 DMA  has tested the Fibonacci 78.60% level of 0.6767 last Nov 2 and barely broke the 0.6800 14 DMA Jan 4 high. We are once again at 0.6767 today 3/7 as of 8:45 GMT.

The Daily Chart shows the 14 DMA at 0.6677 also the 61.80% Fibo retracement, with the 30 DMA bouncing from 0.6555 38.20% Fibo and the 60 DMA small rebound from 0.6615 - 50% Fibo. These 3 averages converged in the 0.6677 (61.8% Fibo) and 0.6555 (38.20% Fibo) plus the flat top appearing at 58.005 level on the 14 day RSI would suggest an upcoming consolidation phase, if those levels are reached.

NZDUSD.Tech.3.7.2016.jpg

 

Topics: European Session. Technical Analysis, forex trading, RBNZ, NZDUSD

 

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