Price has reached our selling area and is dropping nicely from it. We remain bearish below major resistance at 0.7051 (Fibonacci extension, Elliott wave theory, horizontal resistance, bearish divergence) for a further drop to at least 0.6987 support (Fibonacci retracement, horizontal overlap support).
Stochastic (34,5,3) is seeing major resistance below 96% level and also sees bearish divergence signalling that a drop is impending.
Correlation analysis: NZD/USD and AUD/USD are positively correlated meaning they usually move together in the same direction. We are expecting a bounce on AUD/USD but a drop on NZD/USD, hence it is best to exercise caution on this trade.
Sell below 0.7051. Stop loss at 0.7082. Take profit at 0.6987.
