Weekly analysis: Despite the breach of channel line resistance at 0.6723, pair still shows further weakness as it doesn't seem to sustain.
Well, long-term investors don't get bull trapped in this pair as it is clearly dipping within a southward channel that has moved way below 21DMA.
Volumes are mammoth on every price declines (see grey shaded areas), so it is deemed as a conformity to the bearish trend as dipping price on a rising volume justifies the momentum of selling pressures.
This would mean that ongoing bear run is mightier than short-term rallies.
On daily terms, a sharp gravestone doji is traced out at 0.6828 levels where it has rejected a resistance at 0.6883 levels, previous to which one more gravestone occurred exactly hanging channel resistance at 0.6722 levels, these two bearish indications have caused today's prices to slip below 21DMA.
On EOD charts, this has struggled and failed to hold onto 0.6883 levels that have acted as crucial resistance in the recent past as well (see circled areas).
We could foresee the next strong levels of support only at 0.6538.
One can initiate fresh shorts at current levels keeping 0.6885 as strict stop loss for the target of 55 to 60 pips.
RSI on daily chart began diverging the previous rallies 55 levels, while %D line crossover on slow stochastic curve is seen above overbought zone again.
The risk bias to antipodean currencies remains firmly to the downside in 2016.
Hence, we are bearish on NZD for 2016 and forecast NZD/USD at 0.59 by Q1 of 2016 and 0.61 by Q4 of 2016.
Trading tips: We look ahead for further dips as the long term downtrend to resume back again. The trade idea would be good to buy ATM binary puts on rallies for targets of 55-60 pips.
