NZD/USD holds near 3-week high above 0.7000; bulls take control.
NZD/USD has surged to a new three-week high above the 0.7000 strong psychological level during today’s European session, pausing the downtrend. The technical indicators are sending bullish signals, suggesting that a bullish correction is in the process.
From the technical point of view, in the 4-hour chart, the RSI indicator is moving slightly higher, indicating that the market could strengthen in the short-term as it is approaching the overbought area. The MACD oscillator supports a bullish picture as well since the index continues to increase positive momentum above its red-trigger line.
If the market manages to pick up speed, the 0.7050 could offer nearby resistance ahead of the 38.2% Fibonacci retracement level of the down-leg from 0.7395 to 0.6850, around 0.7060. A significant close above the latter would drive the pair until the 0.7095 level, taken from the peak on April 27.
However, should prices decline, immediate support could be found at the 23.6% Fibonacci which stands near the 0.6975 level. Then a leg below that hurdle, the pair could meet the 20- and 40-simple moving averages at 0.6940 and 0.6930 respectively. A drop below the aforementioned obstacles could open the door for the 0.6880 support, identified by the low on May 29.
Looking at the daily timeframe, it is worth mentioning that NZD/USD has jumped above the 20-day SMA signaling further gains.
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