FxWirePro: NZD/USD shooting star reignites bear run - cover dollar shorts against NZD

The pair has currently making all efforts to break support at 0.6556 today after failing to hold the resistance at 0.6590 by forming shooting star pattern candle yesterday.

This pair has struggled at that level quite a lot times in the recent past and failed to sustain (see circled areas). Suppose if it breaks these levels, we require confirmation if it sustains for next 2-3 days reasonably even after breaking above.

RSI on daily chart is converging dips at 47.8402, while an attempt %D line crossover on slow stochastic curve near 80 levels which is oversold zone signals weakness.

Currently, %D line trending at 69.7793 and %D line at 74.6822 while articulating).

We had already stated in our previous write ups any upswings could have been utilized for exiting long positions those who are stuck with trade paralyze.

On weekly charts, from last April the pair has been tumbling non-stop from the peaks at 0.7736 levels to evidence the huge loses.

Overall, as per our strong conviction Kiwi dollar's a long lasted losing streak that was started from last 1 year or so to hit almost 6 year's lows is now most likely retest.

So considering current selling indications, we reckon building up fresh short build ups.

Probable scenario: We could now foresee the retest of targets towards 0.6466 again.

Substitute scenario: Alternatively, any bounces can be expected only after crossing 0.6590 decisively.

Trade recommendation: So far the major trend has been downtrend dominated by the bears and it is heading southwards firstly at 0.6466 and may even expose to 0.6425 levels back again.

As we look ahead for further dips as the long term downtrend to resume back again. We see the pair is likely to perceive implied volatility of ATM puts at 15%, so the trade idea would be good to buy ATM binary -0.49 delta puts on rallies for targets of 40-50 pips.

Alternatively, one can even initiate fresh shorts in put options at current levels using this as right entry point considering minor upswings about 20 to 25 pips upwards.