FX.co ★ NZD/USD Analysis for October 26, 2012

Daily

The New Zealand dollar has been trading between the levels of 76.4% - 0.8230 and 61.8% - 0.8082 of Fibonacci for three weeks. That, essentially, is a flat. Thus, candlestick patterns and reverses which are becoming more and more frequent could be explained. The bearish candlestick pattern Harami was built; the rate may resume its attempt to begin downward move towards at least the correctional level of 61.8% - 0.8082 of Fibonacci. The consolidation of rate above the level of 76.4% of Fibonacci may enable the growth towards the next level of correction 100.0% - 0.8469. It is still not known when flat finishes. Meanwhile, such a complex movement is still observed. It is serious, especially on the 4h chart.

4h

The pair has made a turn near the correctional level of Fibonacci 23.6%; the candlestick pattern has not been formed. Thus, the pair started the next pattern of the downtrend and consolidated under the level of correction 38.2% - 0.8187. Consequently, it is probable that the drop will continue towards the correctional level 50.0% - 0.8134. Formation of bullish candlestick pattern or rebound from one of the correctional levels will enable the pair to make a turn in favor of New Zealand currency. The rate’s turn under the level of correction 50.0% is possible where it happened on the previous occasion.