From investor to scalper is a cycle of analysis in which we take one financial instrument every day and the analysis includes a detailed look at the value from the monthly / weekly chart to the H1 / M15.
NZDUSD has been moving south since setting the formation of double top at 0.8800 in July 2014. Although these declines did not reach the level of 0.6000, in September 2015 the first bullish reaction was observed and we have seen quiet growth since then.
Looking at the weekly chart, we notice that all these increases were within the channel from which we broke down in mid-October. Later declines reached local (blue) support, where a demand response occurred. This week the level has been overcome which means that in the near future we can expect continuation of declines.
Although the level was tested yesterday from the bottom (as a resistance), and there was a supply reaction in the area, the subsequent declines did not set new, lower low. In return a strong demand response has emerged today, and in the near future we expect to be able to re-test this zone.
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As long as this resistance and the downward trend line are not broken, I would expect supply response there, which could be a signal for finding short positions on this instrument.
