The NZD/USD recently formed a double bottom after pushing above the 0.7645 resistance pivot. It has also been rallying sharply from the 0.7455 low to a 0.7750 high before Bernanke's testimony during the 6/7 US session. At the 6/8 Friday US session (last of the week), the sell-off hits a rising trendline and bounces. The market remains bullish, and even though it first broke below the 0 .7645 double top resistance failing to establish that as support, the bounce confirms respect for the bottoming formation. Now a break above 0.77 opens up this week's high with 0.7830 as a target guide from the breakout. (width of the pattern projected in the direction of the breakout).
It should be noted that this rally is still considered a correction when looking at the daily chart. The 0.7830 target would be near the 38.2% retracement (0.7842), of the 0.8470 to 0.7455 bear run since February.
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Fan Yang CMT is a trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.