In March, NZD/USD rallied from a low of 0.7185 to about 0.7695 before stalling and retreating last week. The 4H chart shows a market that lacks direction as the moving averages are oscillating sideways. There was some bullish bias due to the rally, but that has lost steam. The RSI also fails to reflect any directional momentum.
Even though technical signals fail to show any directional bias, price action still hangs on to a bullish structure as long as price holds above the rising trendline seen in the 4H chart. Note that if price holds above 0.7450 it would respect the trendline as well as the 100-period simple moving average (SMA). The RSI however shows loss of the bullish momentum. But if it does not reach 30, it would fail to show bearish momentum in this time-frame.
A break above 0.7550 might be needed to revive the bullish outlook. It would clear above the falling speedline from last week’s high and would clear a key support/resistance pivot. It might also come close to bringing NZD/USD above the cluster of 200-, 100-, and 50-period SMAs. This bullish scenario would also confirm a double bottom seen in the daily chart.
The double bottom seen in the daily chart is still unconfirmed. Price is still holding under the 100-day SMA, and the RSI is still under 60, showing maintenance of the bearish bias and momentum in the medium-term. If price fails to hold above 0.7450, NZD/USD’s double bottom would be invalid, and pressure would return towards the low on the year at 0.7176, with risk of extending lower in the direction of the prevailing.mid-2014-2015 trend.
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