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Talking Points

  • NZD/USD Technical Strategy: Sidelines Preferred
  • Dojisignals hesitation from traders near key resistance
  • Absence of reversal signals casts doubt on correction

NZD/USD’s consolidation continues as the pair teases traders near key resistance at 0.8780. While a Hanging Man candlestick warned of a correction for the pair, the bears seemingly lost steam shy of support at 0.8700. With a Doji having formed on the daily signs of indecision from traders is evident, which leaves clear directional signals absent.

NZD/USD: Doji Signals Indecision Near Recent Highs

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Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

The four hour chart offers a clearer picture of the recent range between 0.8720 and 0.8790. A Morning Star formation near the range-bottom offered a bullish reversal signal and helped herald a recovery for the pair in yesterday’s trading. An absence of bearish patterns casts doubt on the potential for a pullback over the session ahead.

NZD/USD: Morning Star Pattern Yields Intraday Recovery

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Four Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

By David de Ferranti, Currency Analyst, DailyFX

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