NZD/USD formed an ascending channel and is rising very slightly. That looks more like a range trading. NZD/USD has been moving within the range of 0.7400 – 0.7700 for a month. NZD/USD finally showed signs of a potential downtrend following a sharp drop in price on May 11.
Taking the Fibonacci levels from the breakout of the ascending channel, the daily close took place below S2 (0.7370) support level that is 38.2% Fibonacci resistance, while previous support R2 (0.7556) proved to be a resistance that has been rejected. In addition, the daily close was below R1 (0.7512) that is a 61.8% Fibonacci support. Rejection of the 200 MA indicator became the final touch to support further decline.
Amid the above mentioned facts, consider selling NZD/USD around the current level. A target is the 23.6% Fibonacci support – S3 that is located at 0.7282. The daily close above R2 (0.7556) could trigger further extensions up towards already formed double bottom at 0.7740. Therefore, stop loss should be just above R3 (0.7600). Alternatively exit can be triggered on the daily close above R2 (0.7556).
Support: 0.7441, 0.7370, 0.7282
Resistance: 0.7512, 0.7556, 0.7600
The material has been provided by InstaForex Company – www.instaforex.com