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NZD/USD: technical analysis 12.08.20

Current trend

On the 4-hour chart, the instrument is falling along the lower line of the Bollinger Bands. The price has tested the support level of 0.65229 and was slightly corrected upwards, but the general downward trend maintains. The breakdown of 0.65229 and the pair’s sustained trading below it will give the prospect of decline to the area of 0.65002 mark. This level seems a key level for the sellers in the short-term period. There is a chance of an upward rebound. However, the decisive breakdown of 0.65002 will be a signal of the downward trend resumption and let the price decline to the area of 0.64697.

Alternative scenario

If the "bulls" manage to raise the rate above the level of 0.65460 the correction can continue to the area of 0.65613 mark. This level will be a first strong resistance which can activate a downward rebound. Meanwhile, the breakout of 0.65613 will confirm the upward correction development and let the price grow to the area of 0.65918 level, which seems a key correction target.

Technical indicators

Technical indicators mostly keep a sell signal, but the upward correction is possible in the short term.

Bollinger Bands are converging on the background of bearish momentum.

MACD is growing in the negative zone.

Stochastic is preparing to exit the oversold zone and is directed upwards, signaling the development of an upward correction.

Support and resistance

Support levels: 0.65308, 0.65002, 0.64697.
Resistance levels: 0.65613,0.65918, 0.66223.

Trading recommendations

Short positions can be opened below the level of 0.65002 with the target at around 0.64697 and stop-loss at 0.65100.
Long positions can be opened above the level of 0.65613 with the target at around 0.65918 and stop-loss at 0.65510.

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