NZD/USD: double top on sight? – UOB

According to FX Strategists at UOB Group, the pair could be attempting to chart a ‘double top’.

Key Quotes

“We highlighted on Monday (19 Feb, spot at 0.7385) that while upward momentum has improved considerably, only a “NY closing above 0.7435/40” would indicate the start of a bullish phase”.

“NZD has since retreated and the recent price action appears to be forming a potential ‘double-top’ (note that last week’s 0.7437 peak matches the high in January)”.

“For now, downward momentum is not strong but the longer NZD stays below the critical 0.7435/40 level, the higher the risk of a deeper down-move. On the downside, 0.7270 is acting as a strong support and a break of this level could potentially lead to a sharp and rapid decline towards the key ‘neck-line’ support at 0.7176”.