Range Markets

Following a test of the junior channel, the Kiwi shifted its four-day bearish momentum and managed to move past the weekly S1, the 55-hour SMA and towards a massive resistance cluster formed by the 100– and 200-hour SMAs circa 0.6910. This level coincides with the bottom boundary of a previously-breached channel.

The strength of this pattern was proved mid-session when bulls failed to surpass this area in the wake of disappointing US Core Retail Sales published at 1330GMT. Thus, the base scenario favours a retracement from this channel and a short-term decrease in value for the Kiwi.

The nearest support that could limit the pair is the weekly S1 at 0.6873. In case this level is breached, there are no restrictions until the weekly S2 at 0.6822 is reached.