NZD/USD Former Support Line Still Providing Resistance
Chart Prepared by Jamie Saettele, CMT
DailyFX Trading Guides and Forecasts
-Since reversing on 1/20, NZD/USD has retraced most of its early year decline. The rally and sideways trade since September can be interpreted as waves A and B or 1 and 2 within a new bullish cycle. That said, a prolonged period of sideways trading (in the event that trade since October is a B wave) is a possibility. Either way, last week’s high (post NFP high), defined by the 200 day average and long term trendline, is significant (important behavior change would take place on a rally through that level). Also, note that moving averages are clustered together (20, 55, and 200 are shown). The last such ‘clustering’ of these moving averages occurred exactly 2 years ago. A range break soon followed. In other words, a range contraction (and low volatility) period may soon give way to a directional trend.
For more analysis and trade setups (exact entry and exit), visit SB Trade Desk
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.