The NZD/USD has been consolidating since the beginning of February, after making a low on the year at 0.7176. Let’s follow up on the technical development of the Kiwi’s price action.
The daily chart shows a completed double bottom but a failed extension higher so far. The bears are still in charge of this market as the 200-, 100-, and 50-day SMAs are sloping down and in bearish alignment. Price is holding under the 200-, and 100-day SMAs, which reflects bearish bias. Furthermore the RSI has held under 60, which reflects maintenance of the prevailing bearish momentum from 2014.
Now, bulls do have a foothold in the short-term after the rally from 0.72 to 0.7695. Price is holding above the 50-day SMA, and above a key pivot at 0.74. So, we have some bullish control in the short-term with the prevailing bearish mode still intact.
The 4H chart shows some coiling going on. If price falls below 0.74, price will likely uncoil towards the 0.72 handle down to the 0.7176 low on the year. This would be in-line with the prevailing medium-trend from 2014, and is thus the favored scenario.
A break above 0.7630 would suggest bulls are still in control of the NZD/USD in the short-term and would put pressure on the 0.7695-0.77 highs with risk of extending the bullish correction with another swing towards some common highs near 0.7850 as we can see in the daily chart. It will also be challenged by the 200-day simple moving average, so we should limit any bullish outlook to this level before reassessing.
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