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NZD/USD

The Japanese Yen intervention in the opening Asian session not only weakened the JPY, but also strengthened the USD across the board.

After finding resistance at 0.8240, the NZD/USD fell to 0.8165 and then back up to test 0.8240 again. A second failure, and a return to the 0.8165 support is materializing a double top pattern seen in the 1H chart. Note that the 0.8165 level, which is also 23.6% retracemnt has been cracked, but the market has not made a convincing close below it to show topping action.

Using the width of the “double top” and projecting it in the direction of the breakout, the target would be 0.8088. The 38.2% retracement is at 0.8115, and 50% retracement is at 0.8077. A break of the RSI below 40 should help confirm the market to be in a short-term reversal toward these retracement and breakout targets. The bearish scenario is limited for the short-term in context of a medium term rally as long as the reversal is supported above the 61.8% retracement level at 0.8038. Below that, we will have to reassess the bullish scenario and invite the bearish outlook for the medium term.

Fan Yang CMT is the Chief Technical Strategist 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.