FxWirePro: NZD/USD trades a narrow range, bias lower, good to short rallies

• Kiwi bears are taking a breather after 3 consecutive sessions of huge downslide.
   
• Continuation of the 'Bearish Cypher Pattern' seen. Technical indicators are heavily bearish, but some consolidation seen at lows.
   
• The pair is holding support at 38.2% Fib retrace of 0.6862 to 0.7375 rally. Break below will see downside upto 100-DMA at 0.7136.
   
• Trump promised a major tax announcement in a few weeks. USD and the treasury yields spiked after the announcement.
   
• The sharp rise in the Treasury yields in the North American session resulted in further narrowing of the NZ-US yield spread. Thus, the odds of a downside break in the pair are high.
   

Support levels - 0.7179 (38.2% Fib retrace of 0.68621 to 0.73754 rally), 0.7136 (100-DMA), 0.7118 (50% Fib)

Resistance levels - 0.72, 0.7240 (20-DMA), 0.7252 (5-DMA)

TIME  TREND INDEX  OB/OS INDEX    

1H          Bearish               Neutral       
4H          Bearish               Neutral       
1D          Bearish               Neutral        
1W         Bearish               Neutral      

Call update: Our previous call (http://www.econotimes.com/FxWirePro-Bearish-Cypher-on-NZD-USD-good-to-short-close-below-5-DMA-at-07303-528775) has hit all targets.

Recommendation: Book partial profits at lows. We see scope for test of 100-DMA. Lower trailing stops to 0.7240, hold for 0.7135.

Fresh shorts can also be initiated on rallies around 0.72, SL: 0.7250/ TP: 0.7175/ 0.71350.7120

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -129.717 (Highly bearish), while Hourly USD Spot Index was at 74.1136 (Bullish) at 0200 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.