FX.co ★ NZD/USD forms a nice reversal, remains bearish

NZD/USD has bounced further up, forming a nice reversal below the strong resistance at 0.6940 (Fibonacci retracement, Fibonacci extension, Elliott wave theory) and we expect a drop below this level towards the support at 0.6889 (Fibonacci retracement, horizontal overlap support).

Stochastic (34,5,3) is seeing major resistance below the 95% level from which we expect a further drop.

Correlation analysis: NZDUSD and AUDUSD are positively correlated which means that they usually move together in the same direction. We expect a drop in NZDUSD and a rise in AUDUSD which means that one should better be caution on this trade.

Sell below 0.6940. Set stop loss at 0.6971 and take profit at 0.6889.