In our last analysis we noted the bearish divergence in the RSI of NZDUSD. We warned bulls that a pull back was close by and this week started with Dollar strength pushing NZDUSD towards the key support of 0.6875. So far price has made a low at 0.6892 and as long as support holds, bulls could make a come back.
Blue lines -bullish channel (broken)
Red rectangle - target if green support fails to hold
Green rectangle- short-term support
Red line - bearish divergence
NZDUSD has broken the bullish channel. The RSI is providing bearish divergence signs. The most probable scenario is for price to break below support at 0.6875 and head towards the first target area of 0.68. At current market conditions we do not prefer long positions. A pull back towards 0.68 and maybe lower is highly likely, so we prefer to be neutral if not bearish.