NZDUSD is continuing last week’s rebound with strong momentum, reaching eight-month highs at 0.6787 today and at the same time confirming the bullish tendency again. The short-term bias looks positive as the MACD keeps gaining ground above its red signal line, while the RSI seems to be making its way up above its 70 mark, though more progress is needed from the latter. However, the stochastics is looking overbought, as it turns lower above the 80 level.
The 0.6940 resistance level identified by the peak on March 2019 could be a trigger point for steeper bullish action if the pair manages to break today’s top and the 0.6790 barrier. Higher, resistance could run towards the 0.6970 obstacle, a strong barrier in December 2018 before moving towards 0.7060, taken from the high on June 2018.
On the other hand, if the pair reverses back to the downside, investors could push for more losses to 0.6714 and then at the 20- and 40-day simple moving averages (SMAs) currently at 0.6607. If the price continues to drop, support could next come somewhere between 0.6520 and the 23.6% Fibonacci retracement level of the up leg from 0.5467 to 0.6784 at 0.6470 before the focus shifts back to the 200-day SMA at 0.6375.
In the long-term picture, the bounce off 0.5467 turned the outlook from negative to bullish again. However, chances for bearish move are rising if there is a penetration of the uptrend line.
