WEEKLY FOREX ANALYSIS
23 December to 27 December
NZD has gained some strength over the past few weeks. However, NZD/USD struggles to retain the advance from the monthly low (0.6424), and recent developments in the Relative Strength Index ( RSI ) warn of further losses as the oscillator falls back from overbought territory and offers a textbook sell-signal.
NZD/USD fails to test the monthly high (0.6576) even though New Zealand’s Gross Domestic Product (GDP) report shows an uptick in economic activity, with the growth rate climbing to 2.3% from 2.1% per annum in the second quarter of 2019. We can see from the D Chart, there is a very strong Resistance and Support Zone between the prices of 0.65617 to 0.65913
Right now, the prices are starting to consolidate into a very tight wedge . In a smaller timeframe of H4, NZDUSD has attempted to break the D TF Expanding Wedge .
From a price action point of view, the buyers have been unable to create a higher high from 13 December to now. What we would like to see from now is for the price to breakdown towards 0.65913 and break the wedge (blue line) in a H1 TF and safer on a H4 TF. The buyer will attempt to to retest the blue line ( wedge line) before giving up completely. For those who have spotted a H&S as well, I dun think it is valid as the right shoulder is way to close to the head. But nevertheless, it can be considered as well