NZDUSD Hits Resistance at 0.7435; Can the Bulls Overcome that Hurdle?
|NZD/USD edged north on Thursday after it hit support near the 0.7365 level. Nonetheless, the advance was halted by the 0.7435 key resistance, marked by the peaks of the 20th of September and 24th of January. The pair started to recover on the 8th of February after it hit the 38.2% retracement level of the November-January uptrend, while on Wednesday, it broke above the downside resistance line drawn from the high of the 31st of January. What’s more, it is trading above all three of our moving averages, which point up. Therefore, we believe that the short-term picture is somewhat positive at the moment.
Having said that though, we prefer to wait for a decisive break above the key obstacle of 0.7435 before we get confident on more upside extensions. Such a break could initially aim for our next resistance of 0.7460. Another break above that level could have larger bullish implications and may set the stage for the 0.7525 zone, marked by the peaks of the 28th of July and the 1st of August.
Turning attention to our short-term oscillators, we see that the RSI hit its 70 barrier and turned down to cross below its upside support line. The MACD, although above both its zero and trigger lines, shows signs of topping. These indicators suggest that a corrective setback may be in the works before the bulls decide to take the reins again, perhaps for another test near 0.7365.
If that support does not hold, then the retreat may be extended towards our next support barrier of 0.7335.
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Article written by Charalambos Pissouros, Senior Market Analyst at JFD Brokers
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