NZDUSD extended its downside movement from 0.7557 to as low as 0.6780, breaking below an important support level at 0.6817. Further decline would likely be seen over the next several weeks.

On the downside

There is a bearish trend line with resistance at around 0.6930 on the daily chart. As long as the price is below the trend line, the downside movement could be expected to continue and next target would be at the May 30, 2016 low of 0.6675. Below here would aim next support level at the January 20, 2016 low of 0.6346.

On the upside

Near term resistance is located at the falling trend line on the 4-hour chart now at 0.6875. A clear break above the trend line resistance could bring price back towards next resistance level at 0.6979. A breakout of this level will indicate that lengthier consolidation for the downtrend from 0.7557 is needed, then the NZDUSD pair would find next resistance at around 0.7050.

For long term analysis

The NZDUSD pair broke below 0.6817 key support which acts as the neckline of the double top pattern on the weekly chart. Further decline would more likely be seen and the measured move target of the pattern would be at around 0.6100 area.

Technical levels

Support levels: 0.6675, 0.6346, 0.6100.

Resistance levels: 0.6875, 0.6930, 0.6979, 0.7050.

This article is written by Franco Shao, a senior analyst at ForexCycle.

© 2017 Copyright Franco Shao - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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