Technical Setup: Bearish Setup in the NZD/USD
Rowan Crosby • 1 min read
The Kiwi hasn’t been having a good time of it lately and if you’ve been following the politics in New Zealand (let’s be honest, no one has), the markets haven’t liked the new Government. Although we have managed to find a bit of support as we can see on the charts, price has rallied from the lows and is drifting back up.
The big issue for me is that this looks like it’s a bearish pattern. Markets can often do this as they consolidate before another down period.
I feel like we have two ways the NZD/USD can go right now. We can break out of the channel and start the slide, or we can pull back to 0.7000 and then break down. I don’t see more upside than that.
NZD/USD – 240 min Chart.
The 0.7000 level would be my prefered entry. We have the top of the channel, overhead resistance and the very important psychological round number of 70 cents.
If markets pull back on Monday I’ll be targeting that as my short entry point. But don’t forget, this week we have US CPI out on Wednesday and if that number comes in weaker than expected, we do have some upside risk in the NZD/USD. Although a rate hike in the US in December is almost a certainty.