- NZD/USD bulls tests bear commitments at 4-hour resistance at 0.6627.
- Bears look for a break of daily support at 0.6589 to engage fully from there.
As per the prior analysis, NZD/USD struggles in the face of a stronger US dollar despite hot RBNZ inflation expectations, there are bearish developments to take note of.
it was stated in the prior analysis, that ''the Doji candle, if followed by a bearish close on Friday, could set the case for a downside continuation for next week's business,'' as follows:
NZD/USD live market
The price action since the prior analysis has started to play out. The Doji was followed by a relatively strong bearish candle and today's, while yet to close, is also bearish.
The outcome of today's close could leave a Three Black Crows bearish candlestick formation on the daily chart. However, the candles should ideally be relatively long-bodied bearish candlesticks that close at or near the low price for the period. Nevertheless, the focus is on the downside from a longer-term perspective as illustrated in the following weekly chart:
NZD/USD H4 structure and scenarios
From a bullish perspective, the price could easily find support at the daily support structure. If the current tests at 4-hour resistance at 0.6627 fail but support remains firm, we will have a trapped scenario.
This could easily lead to a break of resistance and bullish market structure, leaving the focus back on the upside again for a deeper correction of the weekly chart's bearish impulse.
On the other hand, bears will be encouraged by a break of daily support at 0.6589 and might engage fully from there on the restest of the structure. This would be expected to act as a firm resistance and ultimately lead to a downside continuation of the weekly chart's bear trend.
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