NZDUSD reverses lower as expected

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NZDUSD reverses lower as expected

NZDUSD reverses lower as expected

In our last analysis we noted the bearish divergence in the RSI of NZDUSD. We warned bulls that a pull back was close by and this week started with Dollar strength pushing NZDUSD towards the key support of 0.6875. So far price has made a low at 0.6892 and as long as support holds, bulls could make a come back.

NZDUSD reverses lower as expected

Blue lines -bullish channel (broken)

Red rectangle – target if green support fails to hold

Green rectangle- short-term support

Red line – bearish divergence

NZDUSD has broken the bullish channel. The RSI is providing bearish divergence signs. The most probable scenario is for price to break below support at 0.6875 and head towards the first target area of 0.68. At current market conditions we do not prefer long positions. A pull back towards 0.68 and maybe lower is highly likely, so we prefer to be neutral if not bearish.

The material has been provided by InstaForex Company – www.instaforex.com

Source : https://www.fx.co/forex_analysis/quickview/196376/