Morning Market Update – NZD/USD

NZD/USD’s rally is still in progress and edges higher to 0.7277. Intraday bias remains on the upside at this point. A firm break of 0.7235 resistance will confirm resumption of a whole rebound from 0.7205 bottom. In such a case, NZD/USD would target a projection of 0.7277 to 0.7286 next. On the downside, the 0.72350 minor support will turn the intraday bias neutral first. But near term outlook will stay cautiously bullish as long as the 0.7235 support holds.

Consider the bigger picture, current development suggests that the rebound from 0.7205 is developing into a medium term rise. There is no confirmation of trend reversal yet and we’ll continue to treat such rebound as a corrective pattern. But in any case, further rise is now expected to go even further to 0.7286. A break of the 0.7235 resistance just confirms completion of the rebound. Otherwise, a further rise is now in favor.

A huge accelerating bull run has seen the market burst through the key high of 0.7235 to now see what looks to be a huge breakout above a high resistance. The market has been limited by the resistance band 0.7235 on numerous occasions in the past sessions, but the weakness of the dollar has driven a breakout. Chasing the Kiwi higher here, however, would be a move filled with significant risk. Staying with the bull run may be profitable in the very near term, however if profit taking takes a hit, it could be a sharp reversal, so watch out for exhaustion signals. It is also notable that the entirety of change is clear in current session. The bulls were looking tired before the sharp gains of today, but again the move would now be a corrective signal. Also this would now be a corrective signal that a closing level back inside the support area would now be a profit taking signal. The four hourly chart support around the upside move.

The NZD/USD pair fluctuates around the support area that its signs appear, waiting to confirm breaching this level located at 0.7235 to activate the positive effect of the mentioned pattern followed by rallying towards achieving positive targets that reach to 0.7277 followed by 0.7286 on the short term basis.

Therefore, we will continue to suggest the bullish trend in the upcoming sessions, supported by the EMA50, noting that breaking above will push the price to extend its bullish correction and head towards 0.7277 and might extend to 0.7286 before any new attempt to rise.

Expected trading range for today is between 0.7224 support and 0.7286 resistance.

Expected trend for today: Bullish
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