FX.co ★ NZD/USD dropping nicely from our selling area, remain bearish

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.