Bearish technical events identified in NZD and AUD

Is the short-term uptrend over against the USD?

FOREX 8

The NZD/USD currency pair has had an impressive run since posting lows near the 0.547 level back in March but are we near a short term top? 

Using the "Technical Insight" research tool under the Market Analysis tab, we have identified a bearish technical event. 

The NZD/USD confirmed an Inside Bar candlestick pattern. 



Source: GAIN Capital, Technical Insight

An Inside Bar develops during a strong uptrend when the trading range is completely within the boundaries of the prior bar. This suggests the balance between buyers and sellers is becoming more evenly balanced i.e. a weakening in power for the bulls and increasing in power for the bears.

Another bearish candlestick pattern has been confirmed in the AUD/USD which is highly correlated with the NZD/USD. 

The AUD/USD confirmed an Engulfing Line candlestick pattern. 



Source: GAIN Capital, Technical Insight


Following a clear uptrend, we see two candlesticks where the black real body of the second completely envelops the white real body of the first, showing that the bears have taken over from the bulls.


Although bearish reversal candlestick patterns are no guarantee that the trend will reverse, they are great warning indicators to be kept inside a trader's toolbox to be used with other indicators. 

Check out what other technical events are forming now in the FX market by exploring Technical Insights in the market analysis tab on web trader today! 


Happy Trading.

More from Forex

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.