Previous: NZD/USD Forecast: Bearish Below the 0.7850 Support Cluster (10/18)

NZD/USD

NZD/USD

The NZD/USD has signs of bullish continuation. The market is breaking above a declining trendline. The RSI reading in the 4H chart broke above 60 after failing to break below 40. Given that it had already tagged 70, the momentum is still bullish. We are at the momentum testing the 0.8110 pivot, seen as support early September. The next resistance is 0.8150, 61.8% retracement seen in the 4H chart (of the bear swing from 0.8573 to 0.7468). This is actually coincident with the 50% retracement if we had the fibonacci study going from the 0.8842 high instead, the 50% retracement level is at 0.8155. Above this the 0.82 level is psychological resistance as was support during 9/6. The 0.8330-0.8340 level is the next important resistance area. This is coincident with the 9/16 high and near the 78.6% retracement see in the 4H chart.

The Reserve Bank of New Zealand decides on interest rates on Wednesday.Usually if there are no changes, there is follow up press release or anything. However, the market might have trouble continuing the current bullish break until past this mid-week risk event.

Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.