Morning Market Update – NZD/USD

NZD/USD edged higher to 0.7228 but quickly retreated back into established range. Intraday bias stays neutral for more consolidations. In case of deeper fall, downside should be contained by 0.7167 and bring rise resumption. Above 0.7167 the pair will turn bias back to the upside for the 0.7228 support-turned-resistance next. A break there will target 0.7247.

Looking at the bigger picture, the strong break of the 0.7167 key resistance now argues that the long term trend in NZD/USD has reversed. That is a key bottom that was formed back in 0.7148 on bullish convergence condition. Current rise from 0.7148 will target at 0.7197 next. In any case, medium term outlook will now stay bullish as long as the 0.7167 support holds.

On a strong breakout the market is looking for confirmation that the move will not simply and quickly be retraced. There has been a bit of a wobble on the pair breakout but as yet it is holding. The recent strong candle breakout was followed by a positive move towards upside. However the retracement has bounced today from the previous breakout support band 0.7167, having posted a low at 0.7148. The longer the market holds on to this band of old resistance that has turned into the new support, the more confident the bulls will be. Momentum is still strong with the Stochastics rising. The next task is for the bulls to breakout above high at 0.7197 and to continue the bull run. The four-hourly chart shows an unwinding of near term momentum to levels where the bulls have tended to support. Subsequent upside resistance is 0.7197 before 0.7228. The bulls will remain in control above 0.7167. The NZD/USD pair tested the critical support and keeps its stability above it until now, accompanied by witnessing positive signals through stochastic on the four hours’ time frame, which supports the chances of bouncing bullishly to resume the bullish trend, which its targets begin by breaching 0.7167 to open the way to head towards 0.7383.

We should note that breaking 0.7148 will stop the expected rise and push the price to test 0.71295 direct.

Expected trading range for today is between the 0.7148 support and the 0.7228 resistance.

Expected trend for today: Bullish
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