NZDUSD stood tall on Wednesday by almost 1% after trading flat over the past week. The pair stretched further its rally to new one-and-a-half-month highs on Thursday, but the bulls found a familiar barrier around 0.6940, with the Stochastics flagging an overbought market – the red %D line and the green %K line are returning above 80. The RSI continues to point up, though less aggressively than in previous days, giving some signs of weakness near a former resistance area.
In case prices advance beyond 0.6940, breaking the December top of 0.6968 too, the way could open towards 0.7053 which is the 61.8% Fibonacci of the long downleg from 0.7436 to 0.6423. Slightly higher, the 0.7100 round level could be of psychological importance, which if fails to hold, further gains could follow, probably until 0.7180, a key support area in the February-March 2018 period.
On the downside and under 0.69, the bearish action could pause first near 0.6870 before meeting the 38.2% Fibonacci of 0.6815. Another leg lower could bounce on the upward trendline (0.6780) drawn from the 0.6423 bottom. If the line appears easy to break, the 200-day moving average (MA) at 0.6732 could be the next target ahead of the 23.6% Fibonacci of 0.6668.
Meanwhile in the medium-term picture, NZDUSD is trading within the 0.6968-0.6650 range. Chances for a bull market seem to be improving as the 50-day MA keeps increasing distance above the 200-day MA, but slowly so.
In brief, NZDUSD could see a softer positive momentum in short term, while in the medium-term, the pair holds neutral below 0.6968
