NZD/USD: Further downside to unfold post short-term consolidation – Credit Suisse

NZD/USD has shifted into a near-term consolidation phase, but maintains its “double top”, with support seen next at 0.6489/85, then ST 0.6413/.6393, which is the measured top objective and 200-day average.

Key quotes

“NZD/USD is seeing a pause near-term, in line with daily RSI momentum approaching oversold territory. However, with a ‘double top’ in place, we remain of the view that this halt is merely temporary and further weakness should unfold in due course.”

“Support is seen initially at 0.6512, then 0.6500, removal of which would subsequently see a fall back to 0.6489/85 – the late August low and 23.6% retracement of the entire surge from March – where we would expect fresh buyers at first. Beyond here could then see the back of the broken 2014 downtrend at 0.6456 next. It is worth highlighting though that the ‘double top measured objective’ is seen much lower at 0.6413, just above the 200-day average at 0.6393.

“Resistance moves initially to 0.6572, then 0.6593, ahead of 0.6601, above which would ease the immediate downside bias and question the ‘double top’ that is in place.”