NZD/USD Former Support Line Still Providing Resistance
Chart Prepared by Jamie Saettele, CMT
-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.
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