Forex Technical Update
NZD/USD 4H Chart 3:15PM EST 1/11/2013
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.
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