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Technical Analysis – NZD/USD reached 100-SMA

NZD/USD bulls push above the Ichimoku cloud and 100-SMA.

NZD/USD steady and 1 ½-month old decline below the capping 50-period simple moving average (SMA), saw the bulls on September 3 come on board. The price overcame the 50-period SMA and pushed through the Ichimoku cloud on Thursday to challenge the longer-term 100-period SMA and the inside swing low of 0.6376.

Momentum indicators are backing a bullish view in the short-term. The MACD has distanced itself from its red trigger line and increased into positive territory. The RSI broke into the bullish region too and pushed higher to the 70-level. Although price signals are reflecting a positive picture, traders should be cautious of the SMAs, which continue to trend downwards.

If the bulls keep on, initial resistance could come from the 0.6390 level, which is the 23.6% Fibo retracement level of the down leg from 0.6789 to 0.6268. Moving higher the more important resistance region of 0.6466 – 0.6487, which encapsulates the 200-period SMA, could be a tougher obstacle. If buying interest persists, the 50.0% Fibo of 0.6530 could be tested ahead of the swing high of 0.6556.

If sellers reemerge and the 23.6% Fibo of 0.6390 holds, some interruption in the fall could come from the 50-day SMA presently at 0.6336. Continuing the decline, the recent low of 0.6268 should attract attention before the focus turns to the 2015 low of 0.6235. Breaching lower, the 0.6194 support could be the next target, last seen more than 10-years ago.

Summarising, a shift above the inside swing of 0.6487 from June 14 could paint a neutral-to-bullish short-term picture, though only a move above 0.6590 would confirm it.


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This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Source: XM

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