Chart of the week – NZD/USD
NZD/USD potential short-term trend reversal to the upside
Short-term technical analysisSource: CMC Markets
Time stamped: 17 Apr 2021 at 2:00 pm SGT
- The recent decline of 520 pips (-6.9%) seem in the NZD/USD from its 25 February 2021 high of 0.7465 has managed to stall at a significant support level of 0.6945 on 1 April which is defined by the former major range resistance formed on December 2018 to March 2019 and the 200-day Moving Average.
- Last week, it has staged a bullish breakout from its minor descending trendline resistance that has capped previous rebound in price action since 25 February and the 4-hour Relative Strength Index (RSI) has shaped a prior bullish divergence signal at its oversold region on 25 March. These observations suggest that short-term upside momentum of price action has emerged.
- If the 0.7040 short-term pivotal support holds for any potential minor pull-back, the NZD/USD may continue to see a further potential up move thereafter to target the next intermediate resistances of 0.7260 and 0.73330 in the first step.
- On the flip slide, an hourly close below 0.7040 invalidates the bullish scenario for slide back to retest the 0.6945 key medium-term support.