Weekly
- Last Candlesticks pattern: Shooting star
- Time of formation: 5 Sep 2016
- Trend bias: Down
Daily
- Last Candlesticks pattern: Doji
- Time of formation: 25 Jul 2016
- Trend bias: Near term up
NZD/USD – 0.7180
Kiwi has dropped again and broke below support at 0.7130, suggesting another leg of decline from 0.7376 top is underway for retracement of early upmove to 0.7065-70 and later towards 0.7000-05, however, reckon support at 0.6949 would contain downside and bring another rise later. Only a drop below 0.6949 support would retain bearishness and signal the rebound from 0.6862 has ended at 0.7376 and bring further fall towards 0.6900 later which is likely to hold from here.
On the upside, whilst initial recovery to 0.7185-90 cannot be ruled out, reckon resistance at 0.7247 would cap upside and bring another decline later. Only a daily close above this level would signal the retreat from 0.7376 top has ended and bring a stronger rebound to indicated previous resistance at 0.7403, above there would signal the rise from 0.6862 has resumed for retest of said resistance at 0.7486. Looking ahead, above there would confirm medium term upmove from 2015 low at 0.6074 has resumed for headway to 0.7550, then 0.7600.
Recommendation: Sell at 0.7180 for 0.7000 with stop above 0.7280
On the weekly chart, kiwi has retreated after rising to 0.7376 earlier, retaining our view that further consolidation below this level would be seen and initial downside bias is seen for weakness to 0.7050, then 0.7000, however, reckon downside would be limited to 0.6940-50 and reckon 0.6900 would hold from here, price should stay well above indicated support at 0.6862, bring further choppy trading.
On the upside, expect recovery to be limited to 0.7200 and resistance at 0.7247 should hold. A weekly close above this level would signal the retreat from 0.7376 has ended, bring another test of this level, above there would extend the rebound from 0.6862 to previous resistance at 0.7403 but a sustained breach above there is needed to retain bullishness and signal the pullback from 0.7486 has ended at 0.6862, then the rise from 2015 low at 0.6074 may extend further gain to 0.7550 and later 0.7600, however, reckon upside would be limited to 0.7680 (1.618 times projection of 0.6074-0.6898 measuring from 0.6347), bring retreat later.
