2 Jun 2014
NZD: Short term bearish shift underway - JPMorgan
FXStreet (Bali) - Recent price action in the NZD, according to JPMorgan Strategist Niall O'Connor, finally suggests a corrective phase is underway.
Key Quotes
"For NZD/USD, the violation of the .8517/00 support zone confirmed at least a short term top in place. Again, this area represents the March/April range lows and the 38.2% retracement of the rally from the February low."
"Moreover, note the May peak failed just below the critical .8845 cycle high from 2011 as this area should now act as a medium term ceiling."
"In turn, we see potential for a pullback into the .8435/15 support zone which includes the 50% retracement from the February low, as well as the late-February breakout zone. Still, given the medium term overbought setup, we sense an extension into the .8360/.8290 area cannot be ruled out."
"This area includes the 61.8% retracement from February, as well as the 38.2% retracement from the important June '13 low, the 200-day moving average, the channel support from the May high and the uptrendline from the September '13 low."
"Given the confluence of support in this area, we sense this could be an ideal spot for NZD/USD to attempt at least a short term base. The setup for the crosses is consistent with the developing bearish NZD view."
Key Quotes
"For NZD/USD, the violation of the .8517/00 support zone confirmed at least a short term top in place. Again, this area represents the March/April range lows and the 38.2% retracement of the rally from the February low."
"Moreover, note the May peak failed just below the critical .8845 cycle high from 2011 as this area should now act as a medium term ceiling."
"In turn, we see potential for a pullback into the .8435/15 support zone which includes the 50% retracement from the February low, as well as the late-February breakout zone. Still, given the medium term overbought setup, we sense an extension into the .8360/.8290 area cannot be ruled out."
"This area includes the 61.8% retracement from February, as well as the 38.2% retracement from the important June '13 low, the 200-day moving average, the channel support from the May high and the uptrendline from the September '13 low."
"Given the confluence of support in this area, we sense this could be an ideal spot for NZD/USD to attempt at least a short term base. The setup for the crosses is consistent with the developing bearish NZD view."