If you’ve been keeping up with my updates, you probably know that the neckline from the double bottom formation on the 4-hour NZDUSD has been holding. From the looks of it, the bears are trying to take the pair lower for a retest of support at 0.7050. This seems to be the higher probability move for now but I’d still be careful for a couple of reasons… First, price is stalling around the previous trading session’s lows, causing some long-wicked candles to form. Second, 0.7200, a psychologically significant number, is keeping the pair afloat. Lastly, stochastics indicate that the pair could be oversold.
The 4-hour USDCAD chart is showing some sell signals as well. Look at how the pair just bounced from the descending trend line that I drew. If the pair continues to make lower lows, with its downward movement, it would encounter heavy buying support at the rising trend line (around 1.0500) and horizontal support (1.0450). Keep an eye out for that descending trend line though, as the USD is showing some strength against other major currencies… If that breaks, the pair could head as high as 1.0750 before finding some resistance.
Lastly, lets end with a look at the AUDUSD. The daily chart shows that the pair has formed a symmetrical triangle the past few weeks. The pair is right now sitting just above the rising trend line. Given the consolidation that has formed the past couple of trading days and stochastic showing downward momentum, could we see sellers attempt a break of the trend line? If sellers succeed in bringing price down, look for the pair to test former lows at 0.8950 and 0.8900. On the other hand, if the rising support line holds, price could bounce back up and test minor resistance around the 0.9175 price area.