New Zealand Dollar: NZD/USD (NZD=X) One Small Step Away From a Major Buy Signal

New Zealand Dollar: NZD/USD (NZD=X) One Small Step Away From a Major Buy Signal

New Zealand Dollar: NZD/USD (NZD=X) One Small Step Away From a Major Buy Signal

There is no trading signal here yet, but once it will be triggered, we should receive a sweet long-term deal, with a target of hundreds of pips. This setup is present on the NZDUSD and for a legitimate signal we just need several pips.

Formation, which you can see marked with a yellow color is an inverse head and shoulders pattern. This is a strong bullish pattern, announcing a movement to the upside. One thing is missing here though – breakout of the blue neckline. Today, NZDUSD tried to jump above this resistance but without a success.

Apparently, we will have to wait a bit more. Another positive sign here is the breakout of the red down trendline, which was connecting lower highs since the end of July. Last but not least is the blue horizontal support. It is absolutely crucial here and shows us, that iH&S pattern did not emerge in a random place. The blue support comes from the long-term lows from 2015 – in theory, that is a sweet spot for a reversal, the best one on this pair.

To sum things up, as for now, we have to wait. In theory, the proper buy signal, will be triggered, when the price will break the blue neckline. Positive sentiment will be denied, once the price will come back below the red line but as for now, it is rather unlikely.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 0.64.

The projected lower bound is: 0.62.

The projected closing price is: 0.63.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold (which appears to be the case with FOREX NZD=) to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.

A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend (which appears to be the case with FOREX NZD=) it is called a bullish hammer.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 49.8055. This is not an overbought or oversold reading. The last signal was a buy 12 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 44.26. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 13 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 12. This is not a topping or bottoming area. The last signal was a buy 5 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX NZD= closed up 0.000 at 0.629. Volume was 100% below average (consolidating) and Bollinger Bands were 45% narrower than normal.

Open     High      Low     Close     Volume___
0.629 0.629 0.629 0.629 159
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.63 0.64 0.66
Volatility: 6 8 9
Volume: 31,632 32,551 38,155

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX NZD= is currently 5.0% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of NZD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on NZD= and have had this outlook for the last 13 periods.

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