NZDUSD sped up beyond its January’s peak after breaking above a symmetrical triangle, with the price charting a fresh 34-month high of 0.7382 on Wednesday.
The short-term bias continues to look bullish as the RSI is sloping upwards and towards its 70 overbought mark, and the MACD keeps strengthening its positive momentum above its red signal line.
That said, the price is currently within breathing distance of the 0.7400 ceiling, which triggered the six-month-old downtrend in April 2018, raising some speculation that the bears could be around the corner. If buyers manage to breach that wall, resistance could be next detected near the 161.8% Fibonacci extension of the latest downfall at 0.7450, while higher, the top of 2017 registered within the 0.7525 – 0.7555 region could be another tough obstacle.
On the downside, January’s peak of 0.7314 has been successfully supporting the market over the past couple of days and it will be closely watched in the event of a downside reversal. If the price fails to set a foothold here, the spotlight will turn to the crucial congested area of 0.7250 – 0.7188, where the topline of the triangle and the 20- and 50-day simple moving averages (SMA) are located. Should sellers claim that territory too, the door would open for the 0.7100 handle, a break of which would violate the upward pattern in the bigger picture, likely encouraging another negative correction to 0.7000
In brief, NZDUSD bulls are expected to hold the reins in the short run, though some caution needs to be warranted as the price approaches the key resistance zone of 0.7400 – 0.7450.
Origin: XM
