The Kiwi bulls have returned following a brief retreat towards key support at the 0.8500 handle. However, we’re left to question how much steam the recovery has, given a bullish candlestick pattern did not precede the bounce. There is also notable selling pressure sitting around the psychologically-significant 0.8600 level, which may restrain further gains for NZD/USD.
NZD/USD: Bulls May Lose Steam Near 0.8600
Daily Chart - Created Using FXCM Marketscope 2.0
Drilling down to examine intraday price action; the importance of the 0.8600/05 mark is further reinforced, given that it has acted to cap gains for the pair during Asian trading today. Yet a reversal pattern remains absent at this stage, which suggests the bears may remain in hiding for the time-being.
NZD/USD: Bears Await Reversal 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.