NZDUSD is flirting with the 0.7000 psychological number, after it successfully surpassed the 200-day simple moving average (SMA) yesterday. The Relative Strength Index (RSI) is pointing upwards near the 50 level, while the MACD is jumping above its trigger line in the negative region.
The 40-day SMA could challenge any bullish attempts before touching the 0.7313 resistance, which is the upper surface of a four-month trading range. Hence, any breakout at this point may gather extra interest, with the price likely speeding up to the three-and-a-half-year high of 0.7463. The 0.7557 level, being the high from July 2017 could come next on the radar.
Alternatively, an extension below the 23.6% Fibonacci retracement level of the up leg from 0.5470 to 0.7463 at 0.6995 and the 0.6940 support will strengthen the case for a down-trending market, likely activating a fresh bearish wave towards the 0.6800 level. Failure to hold above that floor could cause another negative extension towards the 38.2% Fibonacci of 0.6700.
In brief, NZDUSD has been in a consolidation area since the end of February and upside corrections may be in progress according to the technical indicators in the near-term.
Origin: XM
