- NZD/USD edged higher for the third consecutive session on Tuesday.
- The set-up supports prospects for a move towards the 0.6500 mark.
- The downside is more likely to remain limited near 200-hour SMA.
The NZD/USD pair traded with a mild positive bias for the third straight session on Wednesday and was last seen trading near one-week tops, around the 0.6465-70 region.
The overnight solid bounce of around 75-pips from the 0.6385 region – over one-week lows – and a sustained move beyond the 200-hour pivotal point was seen as a key trigger for bullish traders. The emergence of some dip-buying on Wednesday supports prospects for additional gains.
Meanwhile, technical indicators on daily charts maintained their bullish bias and have again started gaining positive traction on hourly charts. This, in turn, reinforces the constructive outlook, for a possible move back towards reclaiming the key 0.6500 psychological mark.
The said level marks the top end of a three-week-old downward sloping channel, which constitutes the formation of a bullish flag chart pattern. A convincing breakthrough should pave the way for the resumption of the recent bullish trajectory witnessed over the past three months.
On the flip side, the daily swing low, around the 0.6440 region, which coincides with 200-hour SMA, now seems to act as immediate strong support. Failure to defend the mentioned support might prompt some technical selling and drag the pair back below the 0.6400 mark.
A subsequent fall below weekly lows, around the 0.6375 region, will set the stage for a further near-term depreciating move. The pair might then accelerate the fall towards challenging the very important 200-day SMA support, currently near the 0.6320 region.
NZD/USD 1-hourly chart
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Technical levels to watch
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