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Bears in Charge as NZD/USD Coils

The NZD/USD has been consolidating since marking a low on the year at 0.7176. There was a bullish correction since mid March when the pair rallied to 0.7695. Then, the market flattened again, and we are seeing signs that bears are still in control.

NZD/USD 4H Chart 4/10
(click to enlarge)

The 4H chart shows that price is trading above a sideways moving cluster of 200-, 100-, and 50-period SMAs. This essentially shows a sideways market that is a bit bullish. On the other hand, the 4H RSI held below 60, which shows that the prevailing bearish momentum is still in play. 

We are now seeing a coiling consolidation (lower highs, higher lows). If price fall below 0.7480, it would break this triangular pattern as well as the cluster of SMAs. This would essentially be a bearish continuation breakout that would open up the 0.7176-0.72 lows on the year. But before reaching those lows, we have a key support/resistance pivot area around the 0.74 handle. A break below 0.7350 would strengthen the bearish continuation outlook, especially if the RSI in the 4H chart also falls back below 40. 

During the development of this bearish continuation mode, if price climbs back above 0.7550, we might want to reconsider the outlook. This would represent a market that wants to continue consolidating, with upside risk in the near-term back towards the 0.7695 high and possibly a bit higher in a short-term bullish correction scenario.