This pair has formed lower highs and lower lows connected by a descending channel on its 4-hour time frame.
Is it about to go for another bounce off resistance soon?
NZD/USD 4-hour Forex Chart by TradingView
After rallying then reversing throughout September, NZD/USD is back to finding support at the bottom of its descending channel near the .5750 minor psychological mark.
Dollar weakness on account of the U.S. government shutdown and mostly downbeat jobs data ahead of the NFP release appear to be in play so far.
Can NZD/USD carry on with its pullback?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the New Zealand dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The pair is closing in on the 38.2% Fib that lines up with R1 (.5850) and another minor psychological level, which could be enough to attract Kiwi bears to sustain the downtrend.
A larger correction could reach the 50% level that coincides with the dynamic inflection points at the moving averages or the 61.8% Fib near R2 (.5920) and the channel top.
Look out for reversal candlesticks suggesting that selling pressure could return at these levels, as a continuation of the slide could take NZD/USD back down to the swing low or channel bottom close to S1 (.5730).
On the other hand, a break above the Fib levels and channel resistance could mark the start of an uptrend to the next bullish targets at R3 (.5960) then R4 (.6010).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
