Overview:
- The NZD/USD pair has faced strong resistance at the levels of 0.7358 - 0.7400 because support turned into resistance two months ago. So, the strong resistance has been already formed at the levels of 0.7358 - 0.7400 and the pair is likely to try to approach it in order to test it again. However, if the pair fails to pass through the level of 0.7358, the market will indicate a bearish opportunity below the new strong resistance level of 0.7358 (the level of 0.7358 coincides with a ratio of 88.2% Fibonacci). Moreover, the RSI starts signaling a downward trend, but also it should be noted that the trend is still showing strength above the moving average (100). Hence, we should wait until the downtrend channel is complete. Thus, the market is indicating a bearish opportunity below 0.7218, so it will be gainful to sell at 0.7218 with the first target of 0.7121. It will also call for a downtrend in order to continue towards 0.7034 which represents strong daily support. However, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 0.7425.
