Forex Technical Update
The NZD/USD has cracked a declining trendline seen in the daily chart. The RSI reading in the daily chart also broke above 60, suggesting a loss of bearish momentum. A swing projection targets 0.7960. The 200 day simple moving average is near 0.8050, which is also near a previous pivot. The 0.8085 level is 50% retracement so this 0.8050-0.8085 area is an important resistance cluster. Above that, the first upside target is 61.8% retracement at 0.8254. A break above that opens up 0.85, and the 0.88 high from July/August 2011.
The 1H chart shows that after breaking above the trendline, the market became a bit overbought in the short-term as price tags the upper bollinger band (3 standard deviations from 200SMA). Also the RSI was above 70, but has since come back down near 50 after the market also stalled at 0.79. We are in a throwback that can push toward 0.7780. A bullish market should confirm by staying above this support cluster area (50% retracement, broken resistance trendline tested as support, 200 hour SMA). A break below 0.7750 (61.8% retracement), opens up the bearish outlook (0.7650, 0.7520, 0.7368). Otherwise, we are looking up toward 0.7960, and possibly higher until we get to the resistance cluster in the 0.8050 to 0.8085 area.