Kiwi loses its most important support in years
|The NZDUSD pair capitulated and could no longer resist the avalanche coming from the US dollar. The weekly chart leaves no doubts about the dominant force on this pair and its nearest future.
The most important support in years that we are talking about here isn’t coming just from a single factor. We have at least three, which explains, why it was crucial. First of all, the price was defending the 0.675 level (orange), which was an important resistance in 2019 and 2020. In addition, it was a 38,2% Fibonacci, which is very often a target for corrections. Lastly, the whole bearish correction from 2021 was shaped like a flag (green) and is around 0.675 where we had the lower line of the flag. Three important technical factors in one place. One could expect that this support will hold and ignite a new upswing, right?
Buyers were defending this support for weeks. It did not surrender just like that. Only this week allowed it to break and establish a long-term sell signal. The bears look pretty strong here. Only a comeback above the orange area would cancel the sell signal but currently, this scenario is not likely to happen.
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