NZD/USD—With a Short in Play, Downside Reversal is Expected to Continue

NZD/USD (0.7733)

• Resistance Levels: 0.7820, 0.7898, 0.88076
• Support Levels: 0.7680. 0.7580, 0.7535

Trade Strategy: Short position initiated at 0.7782

The Kiwi is getting ready to move lower against the U.S. Dollar once again. Let’s look at the below daily MT 4 chart. Note the bearish reversal pattern in the form of an Evening Star that formed. This initiated a move lower followed by some volatile price action.

We need a daily close below the key pivot at 0.7680 to challenge the next key technical support at 0.7580. Should the NZD/USD reverse and move higher, then we have a technical resistance level at 0.7820. A daily close above this level will challenge 0.7898.

I have a short sale at 0.7782. The initial target is at 0.7680 and I have a stop loss at 0.7860. I am playing it a bit conservative here as my stop loss is below the high set back on January 12. Once half of the initial objective of 0.7680 is achieved, then I will move my stop loss to break even. There is still room on the downside if one wants to take advantage with a short at the current price level and before we reach the next support at 0.7680.