21 Aug 2013
Flash: Beware NZD/USD bull trap – ANZ
FXstreet.com (New York) - Tim Riddell, Head of Global Markets Research at ANZ analyzes the short-term outlook of the NZD/USD.
Key quotes
“The sharp NZD/USD retest of and secondary rebound off 0.7700 are seen as corrective. The virtual test of 0.8180 (50% retracement of the fall since April’s 0.8670 high) may raise talk of larger scale moves to 0.8300-25, but if dips are not contained this rebound should be seen as completing a sharp corrective phase.”
“Current slippage below 0.8100 highlights risk of a reversal of the recent rally (confirmed below 0.8000) and leave NZD at risk of retesting 0.7700 or even the 0.7600 level.”
“The holding of rising support (dashed red-line) and supportive weekly momentum managed to push aside the bias for further downside (towards 0.7550 or even 0.7335-50) and allow for a period of relatively strong corrective rebounds.”
“Although another rebound above 0.8100 could force a test of 0.8300-25, signs of faltering now suggest an early return to the preceding downtrend. A break below 0.7930 would confirm the risk of renewed declines towards those longer-term retracement levels.”
Key quotes
“The sharp NZD/USD retest of and secondary rebound off 0.7700 are seen as corrective. The virtual test of 0.8180 (50% retracement of the fall since April’s 0.8670 high) may raise talk of larger scale moves to 0.8300-25, but if dips are not contained this rebound should be seen as completing a sharp corrective phase.”
“Current slippage below 0.8100 highlights risk of a reversal of the recent rally (confirmed below 0.8000) and leave NZD at risk of retesting 0.7700 or even the 0.7600 level.”
“The holding of rising support (dashed red-line) and supportive weekly momentum managed to push aside the bias for further downside (towards 0.7550 or even 0.7335-50) and allow for a period of relatively strong corrective rebounds.”
“Although another rebound above 0.8100 could force a test of 0.8300-25, signs of faltering now suggest an early return to the preceding downtrend. A break below 0.7930 would confirm the risk of renewed declines towards those longer-term retracement levels.”