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Technical Check: Important NZD Pairs


Following its failure to surpass the April highs, around 0.7050-55, the NZDUSD dropped to two month lows during mid of the current month; however, the pair kept trading between the 0.6700 – 0.6850 rectangle formation since then which currently controls its short-term movement. Considering the pair's latest bounce from near 0.6700 mark, coupled with recent relative weakness of the USD, the pair seems heading towards 0.6785 immediate trend-line resistance, breaking which 0.6800 and the 50% Fibonacci Retracement level of its March – April advance, at 0.6815, are likely consecutive upside numbers that it could witness. Given the pair's manages to clear 0.6815, the formation resistance around 0.6850 and the 38.2% Fibo level of 0.6875 may hold its further rise captive, which if cleared propels the pair to 0.6920 and 0.6955 resistance levels. On the contrary, 0.6730 and the 0.6700 might continue restricting the pair's near-term downside; however, a clear break below 0.6700 could drag the prices towards 0.6665 and the 0.6625 before pulling the pair down towards 0.6575. If the pair fails to respect the 0.6575 support mark, it becomes vulnerable enough to test 0.6500 round figure mark.


Alike against USD, the New-Zealand Dollar also strengthened compared to its European counterpart and recently dropped below five-week old ascending trend-line support, signaling further downside towards 61.8% Fibonacci Retracement of its April – May surge, near 1.6415. If the pair extends its south-run below 1.6415, the 1.6330 might act as intermediate support during its decline towards 1.6265-60 horizontal support, clearing which chances of its further declines to 1.6175 and then to 1.6100 can't be denied. Meanwhile, pair's trade above 1.6530 trend-line support-turned-resistance negates the recent sign of downside and can propel the prices to 1.6585-90 prior to visiting the 38.2% Fibo level of 1.6615. Moreover, pair's successful advance beyond 1.6615 enables it to challenge the 1.6680 and the 23.6% Fibo level of 1.6735 before challenging the 1.6800 resistance level.


Ever since the GBPNZD cleared eight month old descending trend-line resistance, it kept following a short-term ascending trend-channel formation; though, the pair presently struggles to clear the 2.1750-55 immediate resistance, surpassing which it could extend the rise to 2.1870 and the 2.1955-60. During its further north-run beyond 2.1960, the 2.2000 and the channel resistance level of 2.2150 are likely important numbers for the pair traders to watch. However, 38.2% Fibonacci Retracement of its August 2015 – April 2016 downside, at 2.2200, and the 200-day SMA level of 2.2250 may hold its extend rise captive. Should the pair fails to surpass 2.1750-55 and reverses back, the 2.1550 and the 23.6% Fibo level of 2.1490, followed by channel support of 2.1400, might offer consecutive downside supports to it. Given the pair's daily closing below 2.1400, it can plunge to 2.1100 and the 2.1000 supports.


Although 0.8920-30 resistance confluence, comprising six month old resistance-line, upper-line of a short-term "Rising-Wedge" and 50% Fibonacci Retracement of its August – December 2015 upside, restricted the NZDCAD's up-move, 50-day SMA, at 0.8830 now, presently stops the pair's decline. Should the pair breaks 0.8830, support-line of the immediate bearish pattern and the 61.8% Fibo level, around 0.8770-60, becomes important, which if broken confirms the pair's plunge towards 0.8600; though, 0.8700 might act as intermediate halt. Alternatively, 0.8920-30 can continue limiting the pair's advance, clearing which it can rise to 0.9000 psychological magnet. If the pair successfully trades beyond 0.9000, the 38.2% Fibo, at 0.9075 and the 0.9125-30 are likely consecutive resistance to witness prior to expecting 0.9230 resistance.

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Thursday, 26 May, 2016 / 2:19

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