Hello traders! Looking at the NZD/USD 3-hour chart, the price has reached and rejected the long term downtrend. Besides the trend down remains valid because the pair continues to produce lower lows and lower highs. Will we see another low, breaking below the 0.5920? Yes, this is possible, although the first price must break below the strong support formed at 0.6030.
Previously, this level was like a magnet for the price and acted as the support and resistance on multiple occasions. It is confirmed by two Fibonacci retracement levels as well as the 200 Exponential Moving Average. First is a 161.8% retracement of the Fibs applied to the first corrective wave up after rejecting the downtrend trendline. The second is the 76.4% Fibs applied to the 7-8 May wave up. And finally, this is an important 200 Moving Average price area.
Moving on to the 30-minute chart, we can see that while the price has been rising, the RSI oscillator has been trending down, forming a bearish divergence. In most cases, this can be interpreted as a potential trend reversal or at the very least an upcoming correctional move.
All-in-all, NZD/USD seems to have formed a double top but at the same time rejected the 88.6% Fibs. Therefore, as long as hourly close remains below the 0.6120 high, NZD/USD can be expected to continue trending downwards.
Bias: Bearish while below 0.6120
Potential Resistance Zone: 0.6100 – 0.6120
Potential Targets: 0.6030, 0.6000
Have a profitable trading!