NZD/USD Breaks Below Crucial Support
Axiory | Jan 27, 2022 08:44AM ET
The NZD/USD 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 crucial support in years that we are talking about here isn’t coming from a single factor. We have at least three, which explains why it was vital. 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, indicating three crucial 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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