Jump to content

NZD/USD Technical Setup: Price Action Approaches Key Support


Recommended Posts

Jun 23, 2022 | DailyFX
Richard Snow, Analyst

NZD/USD (KIWI) ANALYSIS

  • Worsening US fundamentals highlight a potential reversal in NZD/USD
  • NZD/USD price action approaching a key long-term area, multiple scenarios considered and discussed
  • Scheduled risk events dominated by US data including final Q1 GDP and PCE data

NZD/USD Forex Technical Analysis – Vulnerable to Reversal Top Followiing  Test of Objective at .6626 - .6722
The NZD/USD pair has been suppressed for a while now but approaches a rather key level of support (0.6200) once again. This presents an interesting dilemma of a possible bounce of breakdown. Chartists will tell you that the more frequently a level is tested and respected, the more likely it is to eventually give way. Thus far, the pair has approached 0.6200 and the 61.8% Fib of the March 2020 major move without continued downside momentum.

Fundamental factors supporting another bounce off the 0.6200 level include China’s supportive monetary policy amid scattered lockdowns and slower growth. Nevertheless, IMF forecast China to recover faster than the US into 2023 which bodes well for the Kiwi as China is new Zealand’s largest trading partner. Looking at the US dollar, we have already seen yields drop and market expectations around the Fed’s terminal rate appears to have peaked last week, around 4%. Concerning earnings projections, slower growth and declining consumer sentiment in the US could result in a softer dollar as recession fears gain momentum. Nearest resistance appears at 0.6395 if we are to witness a rejection of lower prices around key support.


However, if USD data moderates, resulting in lower market expectations around a possible near-term recession, the existing downtrend could continue. In the event of a breakdown of 0.6200, support comes in all the way down at 0.5915 – which corresponds with the 2004 and 2006 major pivot point.

NZD/USD Daily Chart

NZD/USD Technical Setup: Price Action Approaches Key Support

Source: TradingView, prepared by Richard Snow

The monthly chart highlights the 2020 major move and subsequent Fibonacci levels. The 61.8% Fib appears alongside the long-term pivot point around 0.6200, establishing a rather significant zone of support.

NZD/USD Monthly Chart

NZD/USD Technical Setup: Price Action Approaches Key Support

Source: TradingView, prepared by Richard Snow

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Currently run multiple portfolios across ISA, SIPP and a GIA account mostly invested in shares, ETFs and smart portfolios.  There doesnt seem to be any sensible way of looking at historical P&L across my accounts or even on a per account basis.  Tracking this myself in a spready is dull dull dull. I know IG used to be a fairly bare bones brokerage, but is trying to market itself as an investment platform (c/f Cricket ads).  IG clearly have the required data and this is pretty core capability for an investment platform. Where is it?
    • Coffee Elliott Wave Analysis Coffee prices are beginning to turn lower after completing a key technical chart pattern. The commodity has been on a strong upward trajectory since October 2023, but a corrective decline now seems likely before the next leg of the rally resumes, continuing the bullish sequence from late 2023. This analysis explores the potential for a pullback and identifies key levels where the next move higher could emerge.   Long-Term Chart Analysis Coffee prices have historically traded within a wide range, with support levels between $40 and $55, and resistance levels ranging from $276 to $337. The current bullish cycle for coffee started back in May 2019, marking the beginning of a significant upward move. The first phase of this cycle peaked in February 2022, when coffee prices reached notable highs. A corrective second phase followed, ending with a bottom in January 2023. After this low, the third and ongoing phase of the bullish cycle began, and it is evolving as part of a larger corrective pattern within the broader Elliott Wave structure.   The third phase of the rally appears to be developing as a corrective wave, which is part of the larger impulse that started in 2019. With this in mind, the current price action suggests that further gains may come, but not before a significant pullback takes place.   Daily Chart Analysis On the daily chart, the third phase of the recovery completed its first leg, labeled wave (W), in April 2023. This was followed by a three-wave corrective structure, wave (X), which ended at 143.70 in October 2023, confirming support at that level. The subsequent rally represents wave (Y) of the primary degree wave W (circled), completing the bullish phase.   Wave (Y) of W (circled) appears to have formed an ending diagonal structure, signaling the exhaustion of the uptrend. With this structure potentially completed, a corrective pullback in wave X (circled) is expected. Given the sub-wave structure, this correction could take the form of a double zigzag, a complex corrective pattern that typically leads to further downside before the uptrend resumes.   H4 Chart Analysis On the H4 chart, wave (Y) of W (circled) has completed a diagonal pattern, indicating that the rally is running out of steam. The immediate decline that has followed can be identified as wave W of (W) of Y (circled), the first phase of the larger corrective structure. A bounce in wave X is anticipated, but it is expected to remain below the August 2024 high. Once this bounce is complete, another leg lower in wave Y of (W) is likely, completing the initial correction phase.   Thus, while the long-term trend remains bullish for coffee, the market appears to be in the midst of a bearish retracement that could extend lower over the coming weeks. This corrective phase will likely persist as long as the August 2024 high is not breached, offering traders an opportunity to reassess before the next major rally unfolds.   Technical Analyst : Sanmi Adeagbo Source : Tradinglounge.com get trial here!  
    • PANW Elliott Wave Analysis Trading Lounge Daily Chart, PaloAlto Networks Inc., (PANW) Daily Chart  PANW Elliott Wave Technical Analysis FUNCTION: Trend  MODE: Impulsive  STRUCTURE: Motive  POSITION: Minor 1 of (5).  DIRECTION: Upside into wave 1.   DETAILS: Looking for a resumption of the uptrend after what appears to be a three wave move into wave (4), as we currently stand between TL3 and 400$. PANW Elliott Wave Analysis Trading Lounge 1H Chart, PaloAlto Networks Inc., (PANW) 1H Chart  PANW Elliott Wave Technical Analysis FUNCTION: Trend  MODE: Impulsive  STRUCTURE: Motive  POSITION: Wave {iii} of 1.    DIRECTION: Bottom in wave {ii}.  DETAILS: We could also have bottomed in wave 2 already, instead of {ii}. Looking for upside into wave {iii} as we seem to have a clear three wave move into wave {ii}. In this latest Elliott Wave analysis for Palo Alto Networks Inc. (PANW), we utilize the Elliott Wave Theory to break down PANW's price movements. This analysis will provide traders with insights into potential market opportunities based on the current structure and trends. We'll examine both the daily and 1-hour charts for a clearer understanding of PANW's price trajectory.  * PANW Elliott Wave Technical Analysis – Daily Chart* The daily chart shows that Palo Alto Networks (PANW) is in an impulsive trend. The price is currently progressing within Minor wave 1 of Intermediate wave (5). After completing a corrective three-wave move in wave (4), PANW appears to be resuming its uptrend.  * PANW Elliott Wave Technical Analysis – 1H Chart* The 1-hour chart indicates that PANW is progressing within wave {iii} of 1, a highly impulsive and dynamic phase. The analysis suggests that the stock has likely bottomed in wave {ii}, marking the end of a corrective phase. The structure shows a clear three-wave move into wave {ii}, adding confidence to the scenario that wave {iii} is now in play. Technical Analyst : Alessio Barretta Source : Tradinglounge.com get trial here!
×
×
  • Create New...
us