NZD/USD Daily Support holds the key

EagleFX Team EagleFX

After being extremely bearish on the daily chart, NZDUSD had an upside pullback. The price has come down at the same zone where it had started its pullback earlier. Since the price is right at the support zone, the daily price is to make a crucial decision. If the price is to go towards the South, it has to make a breakout at the support level.

On the other hand, if the price is to go towards the North, the support level is to produce a strong bullish reversal daily candle. Yesterday’s daily candle is bearish, though. That states that intraday sellers may remain busy selling the pair today as well. However, a lot depends on how today’s daily candle ends at the end of the trading day. Despite being bearish most of the day, the price may have a strong bounce and ends up being a bullish daily reversal candle.

Let us have a look at the NZD/USD Daily Chart

The chart shows that the level of 0.6307 has been working as a level of support. The daily price did go further down, but all of those daily candles' body closed within this level. Thus, this seems to be the level which is vital as far as the daily chart is concerned. The price is having a bounce and producing a bullish daily engulfing candle headed towards the North. Having a rejection at 0.6450, it has come back to the same level again. If the level produces a bullish daily reversal candle again, it shall attract the buyers since it would be considered as a Double Bottom’s support.

Let us now have a look at the H4 chart

The H4 chart shows that the support level lies a bit further down. Moreover, the price has been down-trending by obeying a trend line. These two equations suggest that the price may remain bearish today as well. The H4 buyers may not get themselves involved in buying the pair until the trend line gets breached.

The H4 chart favors the sellers, whereas the daily chart favors the buyers. This contradiction may make the pair sluggish. The sellers are going to wait for a breakout at the daily support level. The buyers are waiting for a daily bullish reversal candle with an H4 breakout at the down-trending trend line. In a few words, the daily support level holds the key which will help determine where the price will head to.

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EagleFX Team

EagleFX

EagleFX Team is an international group of market analysts with skills in fundamental and technical analysis, applying several methods to assess the state and likelihood of price movements on Forex, Commodities, Indices, Metals and

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