Kiwi: bearish targets for any close & hold below 0.82? by Mary McNamara

The Kiwi has tried to hold above the monthly support trend line and the 0.82 region for most of the Asian session following the RBNZ news from this morning. It is starting to struggle a bit now though as we head towards the London session.

Kiwi 4hr: slipping below the major monthly support trend line and the psychological 0.82 level:

Kiwi4

This is no guarantee of bearish continuation on the Kiwi but a weekly, and then monthly, close below these levels would be quite bearish. I have looked at the monthly chart to identify possible bearish targets for the situation if there is to be bearish follow through. With the help of Fibonacci retracement and analysis of major horizontal S/R levels I have been able to identify a few levels worth keeping an eye on. 

Kiwi monthly: showing fibs and horizontal S/R levels:

KiwiMonthly

The key levels to watch, apart from the obvious psychological whole number levels, seem to be the:

  • 0.80 S/R level.
  • 0.77 S/R level.
  • 0.74 S/R level. This is also the 38.2% fib.
  • 0.70 S/R level. This is also the region of the 50% fib and monthly 200 EMA.

Summary: Traders need to watch for a weekly and then a monthly close below the 0.82 and monthly support trend line on the Kiwi to have greater confidence of bearish follow through. There is the NZ election at the end of next week which could see this pair remain choppy until that time. Fibonacci and horizontal S/R levels can be used to help identify profit targets for any bearish follow through.

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