Talking Points
- NZD/USD Technical Strategy: Shorts Preferred
- Dark Cloud Cover on the daily warning of continued declines
- Further falls likely to be met by buying support at 0.8600
The Dark Cloud Cover formation noted in the most recent candlesticks report has resulted in extended weakness for NZD/USD, which follows on from a failure to crack the critical 0.8740 mark last week. While the signal suggests the potential for further declines, traders should be mindful that the uptrend remains intact. A continued pullback is likely to be met by buying support at the 0.8600 handle.
NZD/USD: Dark Cloud Cover Suggests Continued Declines
Daily Chart – Created Using FXCM Marketscope 2.0
Drilling down to the four hour chart; a Shooting Star formation near the critical 0.8700 handle has prompted the bears to resurface. The absence of a bullish reversal signal in intraday trade casts doubt over the potential for a bounce in the session ahead.
NZD/USD: Bears Resurface Following Shooting Star Pattern
Four Hour Chart – Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
Follow David on Twitter: @Davidde
To receive David’s analysis directly via email, please sign up here.
Learn how to read candlesticks to help identify trading opportunities with the DailyFX Candlesticks Video Course.