NZDUSD recently received a positive boost that thrusted the price above the 200-day simple moving average (SMA). The pair is continuing its approach towards the 0.6451 level, which is the 76.4% Fibonacci retracement of the down leg from 0.6754 to the 11-year low of 0.5468. Further backing the appreciation in price is the improving 50-day SMA at 0.6063 and the rising Ichimoku lines.
The MACD is accelerating above its red signal line in the positive region, while the rising RSI climbs into the overbought section. Moreover, the stochastic lines are in the overbought territory and have yet to signal any weakness in the ascent.
To the upside, first resistance may occur at the key 76.4% Fibo of 0.6451 followed by the nearby swing high of 0.6486. Should buyers overrun these tough obstacles, the pair could jump to see the 0.6553 and 0.6580 inside swing lows of December 18 and January 15 respectively. Gaining more ground, the pair may encounter some friction from the 0.6628 and 0.6664 highs before the five-month peak of 0.6754 is challenged.
If a downside reversal takes form, the 200-day SMA at 0.6306 may provide initial limitations ahead of a support region from the 61.8% Fibo of 0.6263 to the 0.6241 barrier, which also encompasses the red Tenkan-sen line. Moving lower, the price may rest at the 0.6167 mark, where the 100-day SMA and the blue Kijun-sen line currently reside. If price experiences more losses, the 50.0% Fibo of 0.6111 and the 0.6080 trough could come into focus.
Summarizing, if the pair’s recently acquired confidence manages to overcome the 0.6447 border, a neutral bias could be seen returning in the medium-term, with a neutral-to-bullish outlook developing in the short-term timeframe.
Origin: XM
