NZDUSD Top-Down Analysis

Hello Traders,

Here is the Top-Down Analysis of NZDUSD (Monthly, Weekly, Daily for direction and 4H for entry) for

Week 41 - 06 Oct

M > Market is moving in a downward channel. Price broke out of channel last month to test monthly resistance level. This level previously pushed price to downside and we expect price to get pushed down again.

W > Price moved out of channel creating HH and HL, after rejection at resistance level price made an attempt to drop down but was unable to break support created by LH.

D > Price created double bottom at support created by demand zone. While dropping down price created an M formation and as expected price pull back to test the neck and complete formation. This will also bring liquidity to make an aggressive attempt to the downside. Price is now testing resistance level and we expect price to face rejection at this level and drop.

As per COT NZD saw addition of few Long and more Short reducing net positions, confirming weakness of NZD for the said week. ZXY improved its position last week.

4H > We can see loss of momentum as price is unable to create next HH. This setup will be invalid if price creates a HH on 4H timeframe.

Pair Correlation > Pair has a positive correlation with NZDJPY, AUDCHF and AUDUSD and negative correlation with EURAUD and EURNZD.

This was my Idea and I hope you find it useful. If you find the analysis of help please leave a LIKE and FOLLOW for receiving all updates during the week. In the comment section you can share your view and ask questions.

Thank You
AP17FX