NZD/USD technical analysis: Under pressure despite bullish turn by key indicator

NZD/USD's daily MACD histogram has turned bullish in first since July 24.
NZD/USD created a long-tailed candle on Monday, signaling seller exhaustion.

Omkar Godbole FXStreet Contributor

NZD/USD has come under pressure in Asia, but the losses could be short-lived as a key trend-following indicator has turned bullish for the first time since July 24.

The moving average convergence divergence histogram, an indicator used to identify trend changes and trend strength, has crossed above zero on the daily chart, confirming a bullish reversal, that is, an end of the sell-off from the July 19 high of 0.6791 has ended and the bulls have regained control.

Supporting MACD's bullish view is Monday's long-tailed candle – a sign of seller exhaustion near 0.6341.

So, the stage looks set for a corrective rally to the former support-turned-resistance of 0.6482 (May 23 low).

So far, however, the pair has struggled to put on a good show. As of writing, NZD/USD is trading at 0.6385, representing 0.10% losses on the day.

The case for the corrective rally would weaken if the pair finds acceptance below Monday's low of 0.6341.

Daily chart

Trend: Bounce likely

Pivot levels

1. R3 0.6482
2. R2 0.6443
3. R1 0.6419
PP 0.638
1. S1 0.6356
2. S2 0.6317
3. S3 0.6293

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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