NZDUSD has rejected a major weekly resistance level. Will the price continue to trade lower?
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Forex: NZDUSD Is It Bullish or Bearish?
The price of NZDUSD has recently found resistance at the 0.6550 highs. At the moment there could be two narratives in play so support and resistance is going to be important for this forex pair. On the monthly chart we can see that the price is in a strong downward trend, January closed as a bearish candle suggesting the market could trade lower. The weekly time frame however shows the price trading outside of a bearish channel with the potential to form a head and shoulders pattern.
Strength and weakness on the other hand shows us that the NZD is a weak currency and the USD has been getting stronger. The USD strength has been provided by the recent shocking NFP numbers. The Federal Reserve Chairman commented, saying he was surprised at the figures and the Fed will closely monitor the labour market as it may begin to affect the declining inflation rate.
The price on the chart has traded through multiple technical levels and some observations included:
- Price fell from the key resistance of 0.6550.
- If the price follows the monthly time frame we could see a move towards 0.6000.
- Currently price is in a minor trading range which can occur after strong moves in the market.
- Sellers may be interested in short opportunities around the minor range highs.
- Targets for sellers could be the 0.6250-0.6200 which holds confluence with a daily 200 moving average.
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