NZDUSD has been in an uptrend since early January 2016. Prices have been steadily rising from the January 20 low of 0.6346 and reached a new multi-month high of 0.7379 on August 26.
The pair faces strong resistance at the key psychological level of 0.7300 as this level has been tested a few times. After breaking above it, prices quickly reversed back below it. In the near term, support is provided by another key psychological level at 0.7200.
The overall bullish market structure remains in place and the technical indicators are supporting this upside bias. The market is above the 50-day moving average which is rising. Also, the RSI is above 50, which indicates bullishness. However, the outlook in the short term is becoming neutral as long as the market is capped at the 0.7300 level and supported at 0.7200.
Prices would need to make a significant move above 0.7300 and above the multi-month peak at 0.7379 in order to target the next key level at 0.7400. A break below support at 0.7200 and below the 50-day moving average would bring the next important support level at 0.6950 into view. Further downside moves from here would weaken the medium term bullish bias and indicate the beginning of a shift in the uptrend that was in place from January 2016.
Origin: XM
