Weekly
• Last Candlesticks pattern: N/A
• Time of formation: N/A
• Trend bias: Up
Daily
• Last Candlesticks pattern: Shooting star
• Time of formation: 20 Sep 2017
• Trend bias: Up
NZD/USD – 0.6915
Kiwi met renewed selling interest at 0.7206 last month and dropped sharply in line with our bearish expectation, adding credence to our bearish view that the decline from 0.7558 top is still in progress and bearishness remains for this move to bring retracement of early upmove, below support at 0.6818 would extend further decline to 0.6710-20, then 0.6675 support but a sustained breach below latter level is needed to retain bearishness and encourage for subsequent selloff towards strong support at 0.6575 which is likely to hold from here.
On the upside, whilst initial recovery to 0.7000 cannot be ruled out, reckon upside would be limited to the Kijun-Sen (now at 0.7031) and bring another decline. Only a daily close above 0.7056 (previous support now resistance) would suggest a temporary low is possibly formed, bring a stronger rebound to 0.7090-00 but still reckon upside would be limited to 0.7150-55 and price should falter well below said resistance at 0.7206, bring another selloff later this month.
Recommendation: Sell again at 0.7030 for 0.6830 with stop above 0.7130.
On the weekly chart, despite falling to 0.6818 again, as kiwi has recovered after failing to penetrate this support, suggesting minor consolidation above said support would be seen and corrective bounce to 0.7000 cannot be ruled out, reckon upside would be limited to the lower Kumo (now at 0.7043) and bring another decline. A break of said strong support at 0.6818 would add credence to our bearish view that the fall from 0.7558 top is still in progress for further weakness to 0.6700, then 0.6675, only a break below strong support at 0.6575 would signal the rise from 0.6074 low has ended.
On the upside, expect recovery to be limited to last week’s high at 0.7004 and the lower Kumo (now at 0.7043) should hold, bring another decline. Above the Tenkan-Sen (now at 0.7127) would defer and risk a stronger rebound to the Kijun-sen (now at 0.7188) but resistance at 0.7206) should remain intact, bring another decline later. Only a break of 0.7206 resistance would defer and suggest low is possibly formed instead, bring further gain to 0.7245-50 and possibly towards 0.7325-30 but price should falter well below resistance at 0.7435.
