NZDUSD has reversed aggressively back to the upside, after the rebound on the 0.6815 support level, posting an almost 4-month high of 0.7313 during Monday’s trading session. This top is above the 61.8% Fibonacci retracement of the down-leg from July’s more than a 2-year high of 0.7555 to November’s 18-month low of 0.6780.
From the technical point of view, in the daily chart, momentum indicators are holding in the overbought areas with the RSI just above the 70 level, but it seems to be ready for a downward slope after the sharp buying interest. On the other hand, the MACD oscillator is strengthening its bullish momentum and there are no signals for a retracement. Also, the 40-day simple moving average created a bullish crossover with the 20-day SMA in the previous sessions, signaling for further gains.
Upside moves are likely to find resistance at 0.7370, this is the top of August 10. Rising above this area would help shift the focus to the upside towards the 0.7430 resistance level.
In the short-term, the bullish phase remains but if the price slips below the 61.8% Fibonacci mark, it could hit 0.7210. Moreover, a break below the aforementioned obstacle could open the door for a bearish run towards the 50.0% Fibonacci level of 0.7167.
As a side note, in the medium-term timeframe, NZDUSD recorded five green weeks in a row and successfully surpassed the 50 and 100-week SMAs.
