Forex: NZD/USD, watch for a downside breakout - 2ndSkies

FXstreet.com (Barcelona) - NZD/USD appears to be setting the stage for an attempt to break into lower quotes, as recent price activity suggests. The pair has been moving in a non-volatile downward bias, with a price squeeze which retesting for fourth time 0.8375, an area which continues to see steady bids off 0.8360/75 demand as per the drop-base-rally from last April 4.

According to Chris Capre, founder at 2ndSkies: "For about a week now, the Kiwi has been forming a price action squeeze pattern, continually being hemmed in by the 20ema carry, thus limiting the upside. Notice in the 4hr chart how each upside move gets continually sold off printing LH’s (lower highs). The downside line in the sand comes in about .8375, so watch for a breakout setup, or breakout pullback should the level collapse which I suspect it will any day now."

"Only a sustained close above the 20ema will give bulls some chance at taking control of the short term price action" Chris adds.