NZD/USD – Harmonic Retracement Followup

\ 3:16 PM EST \ January 11th, 2013

Forex Technical Update

NZD/USD 4H Chart 3:15PM EST 1/11/2013

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Harmonic retracement: The 1/10 NZD/USD update noted the completion of a rather deep harmonic retracement pattern, and anticipated a bearish outlook. I did note that it would be good to see a bearish divergence with the RSI, but this did not develop. Instead, there was a quick reversal at 0.8456.

Bearish extension: I also noted possible support around 0.8390-0.84, which was a previous support pivot. During the 1/11 session, the market continued falling, opening up the 0.8304, 50% retracement level as possible support. I also note this area since it might be coincident to a rising trendline and/or the 200-4H SMA, if the market falls to it.

Momentum: If the 4H RSI holds above 40, the market still maintains bullish momentum. If the RSI breaks below 40 and tags 30, and price falls below the 61.8% retracement level at 0.8268, falling below the rising trendline, then a bearish outlook could be developing, first with focus on the 0.8153 December low.

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.

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