FxWirePro: NZD/USD attempts to breach crucial support, consolidation phase in major trend exhausted at 50% Fibos – Buzzing leveraged yields via tunnel spreads

On daily terms, NZDUSD rallies are restrained below 7DMAs. The prices attempt to breach below strong support at 0.72 levels.

During August month, the price behaviour tumbles after the failure swings at 50% Fibonacci retracements, more slumps on cards as the both leading oscillators in sync with bearish sentiments.

The pair forms bearish engulfing with bearish SMA crossover, thereby the consolidation phase in the major trend seems to be exhausted as bulls of 10-months highs could not sustain.

To substantiate this stance, leading oscillators (RSI & Stochastic) on this timeframe indicate strength and momentum has been absolutely turned onto bearish swings. While on daily terms, these oscillators converge downwards along with price dips.

MACD has also signaled the continuity in prevailing dips entering into the bearish territory (refer daily charts).

Since China has been the major trade partner of New Zealand and the kiwis’ trade exposure towards China is considerable, we would like to shed some light on Chinese macroeconomic numbers.

Fundamentally, China in the recent past managed to produce an upbeat CAIXIN manufacturing PMIs, the data has outpaced the forecasts, actual 50.3 versus forecasts at 49.9 and previous flash of 49.6. 

Well, aggressive intraday speculators can bet on further dips upto next strong support 0.72, and upon breach below this one could also expect further slump of about 70 pips.

Trade tips:

Contemplating above technical reasoning, at spot reference: 0.7240 levels, tunnel spreads are the best suitable strategy in order to give magnified effects to the yields, so use upper strike at 0.7260, lower strike at 0.72 levels which would mean that the speculative opportunity about 50-60 pips.

Currency Strength Index: FxWirePro's hourly NZD spot index is inching towards -116 levels (which is highly bearish), while hourly USD spot index was at tad below -71 (bearish) at the time of articulating (at 07:08 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex.

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