NZDCHF failed to break the descending channel starting Jul ’17 three times over the past three weeks. This suggests that the region below the 60 figure is acting as a retest and more weakness can be expected.
With each of the bullish attempts being weaker, the current hurdle lays at 0.5940 from a price-action perspective. From a structural perspective, we could get up to the trendline resistance TR1 linking the last three weeks’ attempts and then fall.
This assumes there will be another bullish attempt before sliding lower. However, the short-term ascending channel starting Mar 19, suggests otherwise. Both options remain on the table.
In the short-term, we can notice that bulls have made multiple attempts to break above the most recent high of 0.5940. In fact, since May 19, there have been nearly ten attempts – all have failed.
With that in mind, a break of the 0.59 support could trigger a stronger decline towards the 0.5850 first. This is the 50% retracement of the last impulse and also a projection of a confluence with the lower channel.
A break of the channel could weaken prices to the previous low of 0.5754, where further clues will be received.