NZD/USD: Consolidation pivot areas being defined – Westpac

In view of the Tim Riddell, Research Analyst at Westpac, recent sharp rebounds and positive turns in weekly momentum of NZD/USD suggest that a solid base has for 1Q’17 formed at 0.7145-60.

Key Quotes

“Current rebounds remain within a tight uptrend but show signs of maturing above 0.7500, so forming an inter-week top. Daily momentum is high but not yet turning, so a top is still to be confirmed, The next decent move is likely to involve a test of the 0.6965-0.7000 area.”

“Until a top is confirmed, the uptrend could still force a final squeeze before the anticipated pullback develops.”

“A break below 0.7070 would increase the likelihood of an early and deeper pullback. As with AUD, the style and depth of the next pullback will determine the profile of subsequent squeezes higher.”

“Conclusion: Broad consolidation patterns are forming. Rebounds off 0.6860-65 are near to completion Dips are seen as interim moves before another squeeze higher develops.”