FxWirePro: NZD/USD forms back-to-back shooting stars; would it be black crows? – Stay short as price, volumes and open interests boost up bearish trend

On daily plotting, previous rallies have rejected again at the stiff resistance of 0.7241 levels.

Shooting stars have been formed at 0.7173 and 0.7203 levels that evidence steep slumps, as a result, you could now observe bear candles with big real bodies, would it finish to form 3-black crows? The answer depends on today’s bearish streaks.

On monthly plotting, back-to-back shooting stars evidence slumps below 7SMAs, while bulls have tested supports at 0.6959 (please refer monthly chart).

Rising volumes with falling prices would imply that the bearish trend is robust.

Additionally, rising open interest (OI) with falling prices is also in conformity to the downside traction.

To substantiate this bearish stance, both leading indicators (RSI & stochastic curves) evidence the bearish convergence that signals strength and momentum in selling.

While MACD, on the other hand, has been slightly indecisive but bearish bias.

For now, amid this bearish sentiment the current prices have gone well below DMAs and break below strong support of 0.7040 levels. The decisive break and sustenance below would create more space for the bearish trend.

Hence, we would recommend staying short in futures contracts of this pair with mid-month expiries by snapping deceptive rallies for the targets of 0.6970 and even up to 0.6897 levels. Maintain strict stop loss of 0.7126 and 0.7241 for more aggressive bears.