By: John Ursus
Recommendation: Short Position
Entry Zone: 0.8700 – 0.8770
Take Profit Zone: 0.8160 – 0.8290
Stop Loss Zone: 0.8850 – 0.8900
The NZDUSD has rallied over the past twelve trading months. The sharp move higher took this currency pair from an intra-day low of 0.7682 to an intra-day high of 0.8779. After the NZDUSD reached its most recent intra-day high started to struggle as buyers became scarce and sellers cautiously stepped up their efforts to limit any further significant move higher. The most recent intra-day high formed the top of the current Fibonacci Retracement Fan.
Forex traders should expect a correction from current levels which could take the NZDUSD back down to its 38.2 Fibonacci Retracement and potentially all the way down to the 50.0 mark. Any rallies higher from current levels should be taken as a good opportunity to enter new short positions. Upside potential is currently rather limited while downside potential is very attractive.