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The New Zealand dollar struggle to hold the ground against most major currencies, including the US dollar continued recently. The NZDUSD pair traded below the 0.8300 support area this week, and now correcting higher. The market sentiment remains in the favour of sellers, and there are high chances of more downside in the coming days. The fundamentals also do not go with the New Zealand dollar, as the recent decline in the dairy prices created a lot of pressure on the New Zealand dollar buyers. On the other hand, the economics continued to improve in the US causing upside in the US dollar.

There was a critical contracting triangle formed on the hourly chart of the NZDUSD pair, which was breached earlier during this week. The pair traded as low as 0.8287 recently, and currently struggling to break the 38.2% fib retracement level of the last drop from the 0.8406 high to 0.8287 low. There is a chance of a spike higher in the pair. However, there is an important confluence resistance area around the 0.8350 level. The 200 hourly moving average, 100 moving average and the 50% fib retracement level are aligned around the mentioned level. So, if the pair bounces from the current or a bit lower levels, then the 0.8350-60 resistance zone might act as a strong hurdle for the pair.

On the downside, initial support is around the 0.8300 level, followed by the last low of 0.8387. Any further loses might take the pair towards the 0.8250 support area in the short term.

Overall, selling rallies is a wise option moving ahead as long as the pair is trading below the 0.8380 level.

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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com