The NZDUSD currency pair has bounced from its support zone, which is enforced by its ascending 50 DMA, and rallied to set a higher high as visible in this H4 chart. The most recent candlestick formed a spinning top formation at resistance. We believe this forex pair will correct back down to its ascending support zone before it will attempt another major move.
MACD has formed a large negative divergence and a bearish centerline crossover will cause this currency pair to breakdown from its current formation. RSI has formed a negative divergence as well while it also trades in overbought territory and does not confirm the higher high.
We recommend a short position at 0.8475 which would be an addition to our existing short position we took on March 26th at 0.8380 as well as our existing hedge we opened on April 2nd at 0.8430.
Traders who wish to exit this trade at a loss are advised to place their stop loss level at 0.8525. We will not use a stop loss order and will execute this trade as recommended. Place your take profit level at 0.8400.
Here are the reasons we call the NZDUSD currency pair lower
- NZDUSD forex pair trades at current resistance levels
- Latest candlestick formed a spinning top at resistance
- MACD formed a negative divergence
- RSI formed a negative divergence
- RSI trades in overbought territory
- Profit taking