NZDUSD has become impulsive and hit December 2018’s high. NZDUSD broke above 0.6950 psychological key resistance level. Will bulls recover further in the process? What are the charts and technical indicators are saying? Read on to find further insights into today’s NZD/USD Technical Analysis.
November 25, 2020, | AtoZ Markets – NZDUSD is currently trading around 0.6980 area and trying to push upside. The price found support on the dynamic level of 20 EMA and quite smoothly broke above 0.6950 to 0.6970 resistance area. As per the current price action, the price may retrace downside towards the dynamic level of 20 EMA on the daily chart in the coming days.
The S&P 500 is poised to climb 9% among now, and the finish of 2021 as the foreseen comprehensive salvation of a COVID-19 vaccine drives a financial and corporate income recuperation from the pandemic, as indicated by a Reuters poll of strategists. However, after an over 60% recuperation from the March lows of the appearance to a record high on Nov. 16, the benchmark index is currently up about 10% in the year to date.
On the other hand, RBNZ takes note of the monetary permanency risks related to soaring house costs. However, doesn’t question for a debt to earnings ratio instrument to be added to its full-scale prudential toolbox. Moreover, the Reserve Bank (RBNZ) thinks reimposing loan-to-value proportion (LVR) limitations will adequately help keep up monetary steadiness despite taking off house costs.
NZDUSD Broke Above As the Dollar Index Weakens
NZDUSD is currently trading around 0.6980 area and trying to recover higher. However, the price has become quite volatile on the intraday chart.
Image: NZDUSD 4 Hour Chart
According to the 4-hour chart, NZDUSD broke above and currently residing near 0.6980 area. As per the current price action, if the price can have an impulsive bullish candle close above 0.6950 to 0.6970 area, the bulls may recover upside towards 0.7050 to 0.7060 area. Alternatively, if the price breaks below 0.6970 to 0.6950 area with an impulsive bearish candle close, the bears may regain momentum and decline towards 0.6820 to 0.6800 area in the day ahead.
In addition, the dynamic level of 20 EMA is currently residing below the price. It may work as strong support to push the price upward. The bears may regain momentum if the price can break below the dynamic level in the coming days. Also, the MACD lines are currently residing above the 0.00 level and gradually sloping downside. It indicates that bulls are losing momentum slowly.
NZDUSD May Revert Back to the Mean
According to the daily chart, NZDUSD broke above as bulls are still optimistic. As per the current price action, if the price can have an impulsive bearish candle close below 0.6970 to 0.6950 area, the price may retrace downside towards 0.6820 to 0.6800 area in the process. So, if the price reaches 0.6820 to 0.6800 area and bounced upside, the bulls may continue the bullish trend towards 0.6950 to 0.6970 area as a first target. The second target will be 0.7180 to 0.7200 area if the price can break above 0.6950 to 0.6970 area in the days ahead.
Image: NZDUSD Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing below the price. It may pull the price down as a mean reversion. Besides, the RSI line is currently residing above the overbought level 70. It indicates that bears may regain momentum for a while in the process.
To conclude, after an extended period of bullish momentum, the price may retrace downside before sustaining the bullish bias. A daily close is required to identify the definite momentum in the coming days.