NZD/USD Is Forming A Strong Bearish Trend

This bearish trend is visible on all time frames, starting with the largest ones.

On the weekly time frame the global bearish trend began on 1st July 2014 and on 23rd August 2015 the pair started a correction that formed a bearish flag (0.63467 – 0.74849). It broke below the support trendline during November 2015 after which the pair retraced back above the breakout within the flag. At the moment NZD/USD is once again at the trend line and we could expect a drop and for it to reach the flag’s limit, meaning that it will fall at least until it reaches 0.65469.

Of course, I do not exclude the possibility for another move to the upside before the pair reaches the flag’s limit, but we can expect it to reach it with considerable certainty.

Considering the way the pair is developing on the daily time frame, however, I think the current move to the downside will continue at least until 0.69986.

On the H4 time frame we can see that there is a possibility for it to form a sideways correction, but since that hasn’t happened yet it can’t be said how it will look like and what level it will reach, if it even begins forming. On that time frame we should observe the 0.71150 level and how the pair will behave around it.

On the H1 time frame NZD/USD is moving within a trend channel to the downside, so I think that the current short-term drop will continue toward 0.7160 -0.7150. As we know, however, even the best trend channel ends sooner or later, which is why we need to watch it closely for a breakout.