- NZD / USD is heavier against the 38.2% Fibo area near 0.6280.
- 0.6252 is the last area of support before the race toward liquidity around 0.6340.
NZD / USD sold higher on Wednesday before the bid was drawn in the wake of the US dollar weakness (more on DXY technical analysis here). These moves have created a lot of new market structures that are worthy of multi-period top-down analysis as follows:
NZD / USD weekly chart
The weekly slump remains intact and the market is expected to move into the gray zone below, with a price imbalance near 0.6120 that will maintain a robust area of demand. The center of this demand area is near 0.6040.
NZD / USD daily charts
The structure of the diurnal chart is broken down to make it below the 50% average reverse rally point. The Bears have taken over and the price is coming back down and the weekly demand is expected to continue lower towards the area.
However, when zooming in on the structure, the M-array is in development.
Zoom in M-Formation:
The M-array is a reverse model and is expected to fill any price imbalance left over the neckline as described above. At this stage there is a price imbalance at 0.6318, but the current daily candle closure determines whether or not the bids are void for the rest of the week. Judging by the following short-term analysis, this void of bids before the end of the day with a bias towards 0.6250 is less likely.
NZD / USD H4 chart
In the 4-hour chart, the schematic is busy …
We have a market trying to correct towards a price imbalance (PI) and have a 61.8% Fibonacci near 0.6310. However, the 50% average reverse and 38.2% ratios are below the 0.63 statistic. This leaves the scope for revisiting the order block (OB) or demand / support area near 0.6250. If the bulls are bound there, the bird will fly through 0.6310 and there will be more gas in the tank at 0.6340 and the previous order block around it will be more liquid.
NZD / USD H1 chart
In the hourly time frame, we topped up the latest break in the structure. If the price fails to move higher from the 38.2% fibo area near 0.6280, there is a high probability of mitigating the price imbalance between 0.6270 and 0.6261 that maintains the midpoint of the demand area, or 0.6252 in the order block (OB). This is expected to lead to a flurry of bids and a subsequent run towards liquidity of 0.6340.
From a 5-minute perspective, with a breakdown structure based on the above hourly analysis, the business opportunity now is as follows:
It is expected that the price will reverse the price imbalance (gray areas) and in doing so, the supply area will become less attractive as the market structure is already broken.