NZDUSD maintains the uptrend that started from the May 11 low of 0.6816 to the June 14 high of 0.7318. The bias turned bullish after prices rose above the 200-day moving average at the key psychological level of 0.7100 in early June.
Technical indicators are supporting a bullish picture, with the positive alignment of the tenkan-sen and kijun-sen lines as well as RSI and MACD in bullish territory.
However, after RSI reached overbought levels above 70, NZDUSD pulled back to the 0.7200 handle. A consolidation phase is expected after such a steep uptrend.
A decline in prices would find support at 0.7170 before approaching the key 0.7100 level. From here, the next big figure at 0.7000 comes into view. Breaking below 0.6950 (an important resistance level in May), would negate the current short-term bullish bias and would open the way for a deeper decline towards 0.6816 (May 11 low).
A bounce in prices from current levels would see a re-test of 0.7318 with scope to resume the uptrend towards 0.7375 (February high). A daily close above 0.7100 is required though, in order to maintain upside momentum.
Looking at the bigger picture, the trend is neutral, as NZDUSD has been trading between 0.6820 and 0.7375 for the past six months since December 2016. The shorter-term view is bullish since April and only a move below 0.7000 would change the current outlook.
Origin: XM
