NZD/USD - Bear Speculation: Rebound From The Upper Boundary Of The 1-1 Channel

Trading opportunities for the currency pair: the last 4 weeks have seen the formation of a short-term bullish trend on this pair. There are no clear sell signals for the Kiwi dollar at this moment in time. A reversal model could form by the 22nd of June. Cycles point towards a slide for the exchange rate down to the TR2 trend line. As the upwards movement subsides, the target for downwards movement will be around 0.6938. If the weekly candlestick closes above 0.7376, this scenario will not play out.

Background

The previous idea on this pair was published on the 13th of March, 2017. At the time of its publication, the Kiwi dollar was being quoted at 0.6922 USD. Growth was expected from the support zone of 0.6862 – 0.6897 up to 0.7198. The TR2 trend line and the support held strong. The exchange rate rose to 0.7223.

Current situation

The NZD/USD rate has returned to the TR trend line in the space of 4 weeks, closing above it. Here, I’d like to bring your attention to the upper boundary of the 1-1 channel. Given that it runs higher than the trend line, a false breakout is likely.

Taking into account that the dollar rose on Friday after the UK parliamentary election, this growth could be set to continue. My cyclical analysis currently points to a slide in the exchange rate towards the TR2 trend line. There are currently no clear sell signals for the New Zealand dollar. A reversal model could form by the 22nd of June. In the current situation, there is a suitable figure for a reversal on the daily timeframe in a double top. The downwards target is 0.6938. The scenario for a drop will not play out if the weekly candlestick closes above 0.7376. On Thursday, New Zealand will publish its GDP figures for the first quarter. Quarter on quarter growth is expected. This news could have a profound effect on the currency pair.