Last week, we wrote that the New Zealand Dollar was testing support at the bottom of a rising channel that has guided the pair higher since risky assets (including high-yielding currencies) began to rebound in early March. NZDUSD has now broken below the lower boundary of this channel while showing a Three Black Crows bearish reversal signal, a formidable sign of continued downside ahead. We will enter short from here, initially targeting April’s swing lows at 0.5522. A stop-loss will be activated on a daily close above 0.6601, the 06/02 wick high.
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