NZD/USD Piercing Line Fails To Sustain Momentum As Recovery Stalls

By DailyFx | Updated August 18, 2014 AAA

DailyFX.com -

Talking Points

  • NZD/USD Technical Strategy: Sidelines Preferred
  • Piercing Line Struggles To Sustain Upside Momentum
  • Close Below 0.8400 To Open The 0.8260 Floor

As suggested in recent reports; the Kiwi would struggle to sustain upside momentum in spite of a Piercing Line formation lying in its wake. The bullish reversal signal suggested the potential for a corrective bounce, however a further recovery was likely to prove difficult with the short-term downtrend intact. A push below the nearby 0.8400 barrier would set the scene for a descent towards the mid-February lows near 0.8260. Conversely a daily close above the pair’s recent highs at 0.8530 would be required to mark a small base.

NZD/USD: Piercing Line May Struggle To Find Follow-Through

NZD/USD Piercing Line Fails To Sustain Momentum As Recovery Stalls

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

An examination of intraday price action on the four hour chart below reveals a Bearish Engulfing formation is emerging. If confirmed by a successive down period, it would open a retest of NZD/USD’s recent lows near 0.8420.

NZD/USD: Bearish Engulfing Formation Developing In Intraday Trade

NZD/USD Piercing Line Fails To Sustain Momentum As Recovery Stalls

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

By David de Ferranti, Currency Analyst, DailyFX

Follow David on Twitter: @Davidde

To receive David’s analysis directly via email, please sign up here.

Learn how to read candlesticks to help identify trading opportunities with the DailyFX Candlesticks Video Course.

Related Forex Analysis
  1. Euro May Look Past CPI Data, NZ Dollar Down on Building Permits Drop
    Forex News

    Euro May Look Past CPI Data, NZ Dollar Down on Building Permits Drop

  2. NZD/USD Technical Analysis: Familiar Support in Play Again
    Forex News

    NZD/USD Technical Analysis: Familiar Support in Play Again

  3. NZD/USD Break on the Horizon?
    Forex News

    NZD/USD Break on the Horizon?

  4. New Zealand Dollar Likely to Fall Further
    Forex News

    New Zealand Dollar Likely to Fall Further

  5. NZD/USD Technical Analysis: Bounce Rejected at Resistance
    Forex News

    NZD/USD Technical Analysis: Bounce Rejected at Resistance

Trading Center