Nick Nasad
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NZD/USD - Is Kiwi Breaking Neckline of Head & Shoulders?

Will the NZD/USD follow the AUD/USD down?

  • Looking at the daily chart we see that the medium term pattern resembles a "head and shoulders" though the right shoulder doubled up. Still the underlying pattern is there and it looks like the pair is breaching through the neckline at 0.8190, which also corresponds to the the 200-daily ema as well.
  • The Aussie has slid sharply the last 2 sessions after breaking through its head and shoulders pattern, so the question then is will the Kiwi follow the same path?
  • To the downside, a measured move would target the 0.79 handle, though there is an important support level (which acted as resistance previously) at 0.81 that will need monitoring. 
  • We may also anticipate a pullback towards the neckline before the move downward begins, but that's just one scenario.