HomeContributorsTechnical AnalysisNZDUSD Clocks Fresh 5-Month High; Looks Overbought

NZDUSD Clocks Fresh 5-Month High; Looks Overbought

  • NZDUSD stages a steady recovery from 2023 lows
  • But momentum indicators warn of overbought risks
  • Is there a pullback in sight?

NZDUSD has been in a steep uptrend since its 2023 low of 0.5772, generating consecutive higher highs and a V-shaped recovery pattern. However, the latest advance seems substantially overstretched as the RSI has been within its overbought zone for more than a week.

Should the price defy overbought signals, the bulls could aim at 0.6373, which is the 78.6% Fibonacci retracement of the 0.6536-0.5772 downtrend. Violating that crucial zone, the pair may ascend towards the December 2022 resistance of 0.6441. Even higher, further upside attempts could stall at the 2023 peak of 0.6536.

On the flipside, if the pair experiences a downside correction, immediate support could be met at the 61.8% Fibo of 0.6244. A break below that region could shift the spotlight to the 50.0% Fibo of 0.6154. Failing to halt there, the pair could face the 38.2% Fibo of 0.6064.

Overall, NZDUSD stormed to a fresh five-month high on Wednesday, but its advance is starting to look overdone. Can the pair extend its bullish structure or are we heading towards a correction?

XM.com
XM.comhttp://clicks.pipaffiliates.com/c?c=231129&l=en&p=0
XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading