The NZD/USD pair initially fell during the session on Thursday, but as you can see found enough support at the 0.8350 level to turn things back around and form a nice-looking hammer. The biggest problem though is that this hammer sits just below what appears to be a resistance barrier at the 0.84 level, and the fact that we broke down below there is in fact a very negative sign. That negative sign keeps me a bit skittish when it comes to buying this market, and as a result I actually won’t do it until we get above the 0.85 level.
A break down below the 0.8350 level, or the bottom of a hammer as it were tells me that the markets ready to continue going to the 0.8250 level, and then ultimately possibly to the 0.80 handle which is a significant support level based upon the longer-term charts and the fact that it is a large, round, psychologically significant number.
Bearish trend should continue, but it is getting a bit tired.
I believe that the bearish trend will more than likely continue, but we have certainly made all of the easy money on the way down. The move has been rather drastic, and as a result I feel that this market should ultimately struggle a bit as we get closer to these lower levels. Any bounce at this point in time it has me suspicious, and I am willing to sell all of those bounces as soon as we get a negative candle.
I believe that short-term charts might be the way to go, looking at this market. The downtrend is well-established and I believe that isn’t until the end of the summer that I think that this market could turnaround. At this point time I would have to believe that the trend is pretty much set in this marketplace, at least for the month of August. With that, I believe that there will be nice selling opportunities from time to time, but I’m not going to get overly aggressive. With that, I approach this market cautiously but with a bearish tone.
