NZD/USD Price Analysis: Bird flies into a critical juncture ahead of potentially high volatility
|- NZD/USD bulls in the market but are meeting key resistance.
- Trendline support could come under pressure with high volatility anticipated.
As per the prior analysis, NZD/USD Price Analysis: Bulls take on 0.62s and eye 50% mean reversion, whereby it was stated that the price was running towards a micro daily trendline resistance and that a correction from around the resistance could play out, the following eventuated:
NZD/USD prior analysis
The weekly chart showed the price moving into the neckline resistance area that is below the trendline resistance. A move beyond the neckline was said to leave the trendline resistance vulnerable with the 50% mean reversion area eyed.
NZD/USD H4 chart
It was stated that the bears could be looking to target the 38.2% Fibonacci in this regard on a Fibo measurement drawn between the swing lows near 0.6160 and the trendline resistance.
NZD/USD updates
It was also noted that there was a price imbalance in the greyed area on the 4-hour chart that could have been mitigated if the bulls were to stay in control.
We had the touch of the 38.2% ratio and a subsequent rally into the 0.6260s. In turn, this hit the 50% mean reversion as per the M-formation on the weekly chart:
However, the bulls stayed in control and have taken on territory towards 0.63 the figure as per the following weekly chart:
Note the bullish inverses head and shoulders as well?
Moving to the H4 chart:
We are at a critical area of resistance here and a test of the supporting dynamic trendline could be in play, especially given the high volatility event in the Nonfarm Payrolls in the US session coming up. 0.6270s will be key in this regard that is meeting the 38.2% Fibonacci ratio and structural support:
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