NZD/USD Equidistant Channel In A Strong Downtrend

Nenad Kerkez

The NZD/USD has been dropping consistently within the Equidistant channel versus its counterpart USD mainly due to expectations the Federal Reserve will raise interest rates next week while the Reserve Bank of New Zealand keeps its rate low. Additionally, the dairy prices fell in the overnight auction, adding to overall NZD weakness. The POC zone is 0.6935-50 (H4, DPP, equidistant channel top, ATR top) and we might expect new rejection if the price gets within the zone. 1h momentum or 4h close below 0.6890 marks the continuation towards 0.6858 and 0.6840. The ATR has been low but consistent so the NZD could be also suitable for traders who are afraid to trade volatile pairs.

NZDUSD Hourly Chart

NZDUSD Hourly Chart