The NZDUSD has rallied from strong support levels and formed a triple top as visible in this D1 chart. This currency pair has now formed a triple top formation which is a bearish chart pattern and trades at upper resistance levels. We expect this currency pair to reverse and launch a correction from current levels and back into the upper band of its horizontal support zone.
MACD indicates a gap has formed between its histogram which is now in bullish territory and its moving average which remains in bearish territory. We expect the gap to close during the correction. RSI is trading in overbought territory and nearing extreme conditions. A breakdown should initiate the sell-off.
We recommend a short position at 0.8150 with a potential second entry level at 0.8300. We also recommend a stop buy order at 0.8250 with a take profit target of 0.8300 in order to hedge the initial short position and before adding new short positions to this trade.
Traders who wish to exit this trade at a loss are advised to place their stop loss order at 0.8300. We will not use a stop loss order and execute this trade as recommended. Place your take profit order at 0.7850.
Here are the reasons why we call the NZDUSD currency pair lower
- The NZDUSD has formed a triple top formation which is a bearish chart pattern
- MACD indicates a gap between its histogram and moving average which we expect will close
- RSI is trading in overbought territory and a breakdown should initiate the sell-off
- Profit taking after a strong rally and at solid resistance levels in order to realize trading profits
- New short positions by institutional swing traders at strong resistance levels