Daily Forex Reports | by Kate Curtis | Monday, 30 November 2015 04:46 UTC
NZDUSD has been on a selloff but it looks like a reversal may be in order. Price is forming an inverse head and shoulders pattern on its 4-hour time frame, with an upside break of the neckline at the .6600 handle likely to send the pair up by 200 pips or the same height as the formation.
Technical indicators, however, are suggesting that the downtrend could still carry on. The 100 SMA is far below the 200 SMA and is showing no signs of making an upward crossover, which means that the path of least resistance is to the downside.
Meanwhile, stochastic and RSI are in the oversold regions so sellers might take control. In that case, NZDUSD could resume its drop to the .6400 major psychological support or much lower.
Event risks for this setup include the New Zealand Global Dairy Trade auction midweek, which might yield another decline in dairy prices. In addition, a bunch of top-tier reports are lined up in Australia and these might also influence Kiwi price action.
By Kate Curtis from Trader's Way
Forex Market Analysis
Subscribe to Newsletter