NZD/USD : chart framework.

At first glance, we can notice the beginning of a downtrend (this last one should be confirmed in the next trading sessions, of course). This is due to :

• A Doji candlestick pattern (it emphasizes both weakness and indecision in an uptrend ; if it is confirmed in the subsequent sessions, it is a good signal) ;

• Linked to the previous aspect, the are also two red candles ;

• The BBs shows the overcoming of the currency cross on the upper band (for this purpose, see the shadow of the Doji) ;

• The RSI shows an overbought area (above 70, see the bullish trendline of the indicator and its blue line) ;

• The upper shadow of the Doji represents a repulsion area (look at the previous top and at the horizontal line).

Chart from Markets.com

Let's have a look at the following charts. We can notice that the bullish trend is well set, marked by the parallel channel. However, there are the first symptoms of subsidence, due to the above-mentioned reasons and due to other indications. The MACD shows the crossing of the red and blue lines and crossing of the histograms, from top to bottom (over line zero).

Moreover, we are in the proximity of the test of 23.6% FIBO level and near the median line (BBs) and EMA 20 (a break of this level, it would be a great short signal ; see the yellow ellipse). 

The second bearish target will be the 50% FIBO level (this last one is also the double bottom, see the green arrows and blue ellipse). 

Chart from Markets.com

Chart from Markets.com

In the following chart, the parabolic SAR is set, in the form of black crosses. There is a first black cross above the candles. We need almost two or three other crosses for a clear and short signal. 

So, lets' follow the next trading sessions.

Chart from Markets.com

Finally, we can say that there is not a strong trend reversal, at the moment. It is too early to speak about it. In spite of this, there are good signals of the weakening of the current trend : if it will be confirmed, it will allow us to set up a bearish trading strategy with the first target 23.60% FIBO level and the second target 50% FIBO level. We can take a few more risks by anticipating and benefit from the movement, with a tight stop loss just above the maximum of the Doji (at about 0.68).