Chart of the day NZDUSD further potential downside towards major support zone

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By :  ,  Financial Analyst

Short-term technical outlook on NZD/USD

Key technical elements

  • The longer-term (major degree) uptrend in place since 24 August 2015 low of 0.6196 remains intact. The current medium-term decline from 05 July 2017 high of 0.7558 is coming close to a major support zone of 0.7080/50 (see daily chart).
  • The aforementioned major support zone of 0.7080/50 is defined by the pull-back support of a former range resistance from 07 September 2016 high, former swing high areas of 21 March/19 April 2017, the lower boundary of the medium-term descending channel and a Fibonacci projection cluster (see daily & hourly charts)
  • The daily RSI oscillator continues to inch down from its corresponding resistances below the 50% level without any bullish divergence signal. In addition, it still has not reached an extreme oversold level. These observations suggest that medium-term downside momentum of price action remains intact.
  • In the short-term, the NZD/USD has traced out a bearish continuation chart configuration called “pennant” in place since its minor swing low of 31 August 2017 (see hourly chart).
  • The key short-term resistance now stands at 0.7200 which is defined by the upper limit of the aforementioned “pennant” and the former minor swing low area of 24/25 August 2017.

Key levels (1 to 3 days)

Pivot (key resistance): 0.7200

Supports: 0.7150 & 0.7080/7050

Next resistance: 0.7240


The on-going short-term downtrend in place since 29 August 2017 minor swing high remains intact for the NZD/USD. As long as the 0.7200 key short-term pivotal resistance is not surpassed and a break below 0.7150 (lower limit of the “pennant”, the NZD/USD may see a further downleg to target the major support zone of 0.7080/50.

On the other hand, a clearance above 0.7200 should negate the bearish tone to see a corrective up move to test the next resistance at 0.7240 (the upper boundary of the medium-term descending channel from 27 July 2017 high).

Charts are from eSignal


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