The NZDUSD has rallied from its lows as visible in this H4 chart. The rally was halted by double resistance. The first resistance comes from its previous highs which caused this pair to correct to the lows from which it launched its current rally. The second resistance is provided by its 200 DMA.
MACD shows that momentum has faded during the recent rally which does not support any future move higher. RSI has showed the same weakness, but has not yet reached overbought territory. Despite that this pair is prepared to move lower given all the bearish pressures and may breakdown from its current formation.
We recommend taking a short position at 0.8220 with a second entry level at 0.8350. Should this pair breach 0.8270 to the upside we advise traders to take a long position at that level before adding to existing short positions.
Traders who wish to exit this trade at a loss are advised to place their stop loss level at 0.8270. We will execute this trade as mentioned and do not use stop loss levels. Place your take profit level at 0.8180.
