The NZD/USD started the week with a bounce off of a new low on the year at 0.7176. The 4H chart shows the kiwi-greenback rallying to about 0.7450 before stalling.
The 4H chart shows the pair consolidating sideways between roughly 0.7333 and 0.7450. While it trades in this tight range, the bearish bias still remains. Price is still below the 200-, and 100-period SMAs in the 4H chart, and the 4H RSI has remained below 60 for the most part. This shows maintenance of the bearish bias and momentum.
Now, if price pushes above 0.7450 and the RSI pushes above 60 again, we should be seeing a bullish correction towards the 0.76 area, near where the 200-period SMA resides.
The daily chart shows that if price does push higher to 0.76, NZD/USD will be testing the support of a previous consolidation area. It will also be approaching the 50-day SMA.
Actually, the support of that multi-month consolidation started at 0.77 then drifted lower to 0.76 before finally breaking lower in a downswing and not choppy action. So, we should expect resistance around the 0.75-0.766 area if price breaks above 0.7450.
In the near-term, let’s monitor the 0.74 handle. When we look at the 1H chart, we do indeed see a sideways market. However, today’s action completed a local triple top.
Now, this gives us a slight bearish bias, but only in the near-term. It is suggesting that the market will go back to test the 0.7333 low. If price instead pushes back above 0.74 without testing that low, it would suggest bulls are in charge in the near-term, and the pressure would be back to the 0.7450 resistance. However, if price holds below 0.74, the pressure should remain on the 0.7333 low.
A break below 0.7330 then would expose the 0.7176 low with risk of NZD/USD extending even lower towards the 0.71 handle.
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