Last week, we wrote that the New Zealand Dollar could be setting up a Triple Top ahead of a return to downward momentum. This scenario looks to be unfolding, with NZDUSD showing a decisive Bearish Engulfing candlestick pattern below resistance above the 0.60 level. Negative divergence on the RSI oscillator bolsters the likelihood of the downside scenario. We will enter short from here, initially targeting the previous swing bottom at 0.5529. Notably, this will be a soft target, meaning we see this as the next important juncture for NZDUSD but will not place a hard take-profit order there expecting the downtrend to continue for substantially longer. A stop loss will be activated on a daily close above the 05/11 wick high at 0.6132.
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