Oct 21, 2022
VOT Research Desk
A last long squeeze into positions that have been profitable since the beginning of the week may be imminent for NZD/USD.
As US rates blast towards new bull cycle highs, the US dollar is ready for a recovery off crucial daily support.
The chart below shows the likelihood of a sell-off into last week’s lows and a new weekly low of 0.5512. This is less than the 97 daily ATR.
The bearish template for this week is shattered, and the bird is perched on a broken limb of it, hovering over long positions like a guillotine because this structure was previously destroyed in Tokyo.
On Wednesday. At 0.5682, the price is below the daily peaks, the neckline of the M-formation, and the recently broken structure 2. For the upcoming sessions, there is a chance that structure 1 may break at 0.5661 once more.
The final structure that protects in-the-money long positions to the prices at the start of the week at 0.5550 and then to the previous weeks bear cycle lows of 0.5512 will be looked at as 0.5650 if the bears can break through there.
The payout is still on the upside of the trend line and paying out at its highest rates in years. In the near future, a test of the trend line support and the W-formations support may be in progress.
Should the yield, however, rise higher, the US dollar may surge and serve as the impetus for the long squeeze in the kiwi.
