Hugo
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Hugo in HTO Trading,

NZDUSD: On the road to 2017 low

Since the beginning of the year the currency pair gained 0.4% but last week lost more than 3.0% and made a phase change, shifting from a warning to a distribution phase.

Last week the NZDUSD plunged with a wide range and closed near the low of the week, in addition managed to close below the previous week low, which suggests a strong bearish momentum.

The stochastic is showing an extreme oversold market although is still displaying a strong bearish momentum.

The downward correction broke thru all Fibonacci retracement levels and the 50-week moving average a signs that the bears are in control however due to the sharp fall with high volume the currency pair may perform a pullback before another down leg.

Expecting an upward move to a Fibonacci retracement at 0.7100 on a break above other Fibonacci retracement at 0.6992 (scenario 1) however a bounce from a weekly support at 0.6897 may also push currency pair back up to a Fibonacci retracement at 0.6992 (scenario 2).