NZD/USD Technical Analysis: Bullish Pattern Still in Play
NZD/USD Talking Points:
- The New Zealand Dollar is struggling to find a direction within a bullish reversal pattern
- A breakout above the near-term resistance line exposes the March 27 high around 0.7303
- Immediate support looks to be 0.7186 which is then followed by two significant trend lines
The New Zealand Dollar has been confined in a falling wedge against its US counterpart and it has recently struggled to find a direction within it. Last week, NZD/USD recoiled from the descending resistance line. However, the pair was unable to push below the 38.2% Fibonacci retracement at 0.7186.
A falling wedge is a bullish pattern that needs confirmation via a breakout of resistance. In this case, such an outcome would mark continuation of the dominant uptrend that NZD/USD put in towards the end of last year. But to get there, the pair would have to make some progress higher.
A break above near-term resistance would expose the March 27th high around 0.7303. Beyond that is that 14.6% minor level at 0.7341. Should NZD/USD keep climbing, it might have a hard time pushing above the horizontal September 2017 resistance line around 0.7437.
Conversely prices may find a direction lower. In that case, the aforementioned 38.2% level stands as immediate support. A break below that exposes the lower line of the falling wedge followed by the long-term rising line from September 2015.
NZD/USD Trading Resources:
- Join a free Q&A webinar and have your trading questions answered
- See how the New Zealand Dollar is viewed by the trading community at the DailyFX Sentiment Page
--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com
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